International Finance - Adrien Verdelhan (MIT) and Nick Roussanov (Wharton) [Summer Lecture #2]
Adrien Verdelhan (MIT) and Nikolai Roussanov (Wharton) give lecture on International Finance "Macro Finance Across Borders". In particular, they touch on topics of exchange rates formation (forex/currency market), deviations from the Covered Interest Rate Parity, and the importance of the Dollar. This is the second lecture in Macro Finance Society-Wharton Virtual Summer School 2020: “Open Questions in Macro Finance,” August 2020
Here you can find the full schedule of the MFS-Wharton Virtual Summer School:
https://macrofinancesociety.org/mfs-w...
Adrien Verdelhan's (MIT) web-site: https://mitsloan.mit.edu/faculty/dire...
Nick Roussanov's (Wharton) web-site: http://finance.wharton.upenn.edu/~nro...
The mission of the Macro Finance Society (https://macrofinancesociety.org/) is to advance and disseminate high-quality research in Macro Finance, which is a broad area at the intersection of financial economics and macroeconomics. The research conducted at The Society emphasizes microeconomic foundations via (dynamic) structural modeling, while being grounded in the data. Members of The Society consist of both financial economists and macroeconomists, who share the common goal of advancing and disseminating high-quality research in Macro Finance.
Macro-finance addresses the link between asset prices and economic fluctuations. Macroeconomics (from the Greek prefix makro- meaning "large" + economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole. Macroeconomists study topics such as GDP, unemployment rates, national income, price indices, output, consumption, unemployment, inflation, saving, investment, energy, international trade, and international finance. Asset prices are the prices for which financial instruments, such as stocks, bonds, currencies, etc., are bought and sold.
International finance (also referred to as international monetary economics or international macroeconomics) is the branch of financial economics broadly concerned with monetary and macroeconomic interrelations between two or more countries. International finance examines the dynamics of the global financial system, international monetary systems, balance of payments, exchange rates, foreign direct investment, and how these topics relate to international trade.
The foreign exchange market (Forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries. The fact that this condition does not always hold allows for potential opportunities to earn riskless profits from covered interest arbitrage.
Check out
"Deviations from Covered Interest Rate Parity" by Wenxin Du, Alexander Tepper, Adrien Verdelhan - https://www.nber.org/papers/w23170
"Common risk factors in currency markets" by Hanno Lustig, Nikolai Roussanov, Adrien Verdelhan - https://www.nber.org/papers/w14082
MFS web-site: https://macrofinancesociety.org/