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The Hedging Channel of Exchange Rate Determination
We document the exchange rate hedging channel that connects country-level measures of net external financial imbalances with exchange rates. In times of market distress, countries with large positive external imbalances (e.g. Japan) experience domestic currency appreciation, and crucially, forward exchange rates appreciate relatively more than the spot after adjusting for interest rate differentials. Countries with large negative foreign asset positions experience the opposite currency movements. We present a model demonstrating that exchange rate hedging coupled with intermediary constraints ...
The Economic Outlook for Delaware and the Nation Amid COVID-19
Patrick T. Harker, president and CEO of the Federal Reserve Bank of Philadelphia, told the Delaware State Chamber of Commerce that he foresees an uneven economic recovery for the state. He presented his remarks via conference call.