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Currency Unions and Breakups
Variant Perceptions countered prevailing wisdom that a breakup of the union would be a cataclysmic event, showing the history of currency union breakups, leading indicators, and their results. Breakups...
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Stock Market Performance After Devaluations Depend on Labor Costs and...
Abstract: This paper examines how devaluations affect the relative cost of labor and capital and therefore influence production levels, profitability, investment decisions, and stock returns for firms...
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Prospects of European Disunion as Credible Alternatives Presented
The Wolfson economics prize seeks ideas for an orderly European Union disunion. Five finalists were recently announced. It’s notable since the probability of a disunion goes up quite a bit if a...
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Leading Indicator of Currency Union Break Ups
Abstract: “Historically, dissolutions of currency unions are not unusual. I use an annual panel data set covering 245 country pairs that use a common currency (of which 128 are dissolved) from 1948...
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Real Interest Rates Help Forecast Currency Crises
The limiting conditional probability of an extreme currency crash given an extreme positive real interest rate signal is estimated as 30%. “In our out-of sample assessment period from July 1995...
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