Does intervention explain the forward discount puzzle?

An investigation of the impact of U.S. and German central-bank interventions on the forward discount puzzle for two exchange rates-the German mark/U.S. dollar and the Japanese yen/U.S. dollar-using official 1985-91 data. The evidence on the importance of intervention is strongest for the DM/$. However, the direction of the impact is inconsistent with the findings of Flood and Rose (1996) if periods of intervention are viewed as equivalent to fixed-rate regimes.Foreign exchange - Law and legislation

Public subsidies for private purposes

A discussion of the use of municipal debt issues to fund publicly supported stadiums, focusing on the role of federal tax exemption as a hidden subsidy in reducing local funding costs and on the rationale for seeking public subsidies of private, local facilities.Municipal finance ; Securities, Tax-exempt

Bank capital requirements and leverage: a review of the literature

An assessment of how banks adjust to increased capital requirements, illustrated by a model of a bank's choice of optimal leverage.Bank capital ; Financial leverage

An analysis of causal relations among inflation, financial structure, Tobin's Q and investment

An examination of the short- and long-run effects of inflation on financial markets and investment.Inflation (Finance) ; Corporations - Finance

Intervention and the risk premium in foreign exchange rates

An analysis of how central-bank exchange-market intervention can affect both the level of exchange rates and the risk premium in asset returns, showing how the risk premium is related to the conditional variances of intervention and other exogenous processes.Foreign exchange - Law and legislation ; Risk ; Foreign exchange rates

How important are U.S. capital flows into Mexico?

An analysis of the often-understated role of capital flows from the United States to Mexico following passage of the North American Free Trade Agreement in late 1993, examining their implications for the Mexican economy.Mexico ; North American Free Trade Agreement ; Capital movements

Financial structure and the adjustment of capital stock

An analysis of the corporate investment decision when financial structure has real effects, utilizing data for the U.S. manufacturing sector from 1954 to 1980.Corporations - Finance ; Capital

New results on the rationality of survey measures of exchange-rate expectations

In light of research questioning the usefulness of economists' models of exchange-rate determination, this paper investigates the rationality of survey measures of expectations for Deutschmark/dollar exchange rates for 1989-97. Using Liu and Maddala's (1992) "restricted cointegration" test, the author cannot reject the assumption that survey measures are unbiased exchange-rate forecasts. This finding is related to market participants' anticipation of the impact of economic policies.Foreign exchange rates ; Rational expectations (Economic theory)

Bank exposure to highly leveraged transactions

An assessment of banks' changing involvement in highly leveraged transactions through the use of regulatory data collected in 1991 and 1992, which reveal that overall bank exposure to highly leveraged activities currently poses little threat to bank capital or to the bank insurance fund.Bank investments ; Financial leverage

Can foreign exchange intervention signal monetary policy changes?

An examination of the ability of foreign exchange intervention to signal upcoming changes in monetary policy, showing that for such a signaling mechanism to make sense, the link between intervention and monetary policy should be clear, the implied policy should be credible, and information about intervention should be communicated accurately to market participants.Foreign exchange - Law and legislation ; Monetary policy