The profitability of forward currency speculation by central banks: A comment
Abstract The article by Beenstock and Dadashi (1986), which tries to examine the profitability of the forward currency operations of the Canadian Exchange Fund Account, is misleading in two ways. First, its longer sample period mixes forward contracts entered into during a fixed exchange rate period (contracts which proved unprofitable) with contracts from the flexible exchange rate period. Second, it assumes that the net forward position reflects entirely forward contracts and not ‘overnight’ spot transactions. Official reports and econometric evidence show that the latter transactions predominated.
Re-Examining the Behavior of Real Exchange Rates
This study shows that the real exchange rate is related to the real interest rate differential and risk premium for all but one of the exchange rates investigated, when these two explanatory factors are proxied by forward premia. In general, our results are consistent with the literature that rejects the notion that real exchange rates follow a martingal and suggest that monetary factors may be important determinants of real exchange rates.
AXIOMATISABILITY OF WEAKLY FLAT, FLAT, AND PROJECTIVE S-ACTS
ABSTRACT This paper gives necessary and sufficient conditions on a monoid S that the class of flat left S-acts be (first order) axiomatisable. It presents also a streamlined version of the result of Stepanova that the class of projective left S-acts is axiomatisable if and only if the strongly flat left S-acts are axiomatisable and S is left perfect.