New Shocks, Exchange Rates and Equity Prices /

We study exchange rate and equity price dynamics, in general equilibrium, in the presence of news shocks about future productivity and monetary policy. We identify a condition under which these asset prices become more volatile without affecting the volatility of the underlying processes-a positive...

Täydet tiedot

Bibliografiset tiedot
Päätekijä: Cova, Pietro
Muut tekijät: Matsumoto, Akito, Pisani, Massimiliano, Rebucci, Alessandro
Aineistotyyppi: Aikakauslehti
Kieli:English
Julkaistu: Washington, D.C. : International Monetary Fund, 2008.
Sarja:IMF Working Papers; Working Paper ; No. 2008/284
Linkit:Full text available on IMF
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020 |z 9781451871425 
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100 1 |a Cova, Pietro. 
245 1 0 |a New Shocks, Exchange Rates and Equity Prices /  |c Pietro Cova, Alessandro Rebucci, Akito Matsumoto, Massimiliano Pisani. 
264 1 |a Washington, D.C. :  |b International Monetary Fund,  |c 2008. 
300 |a 1 online resource (36 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a We study exchange rate and equity price dynamics, in general equilibrium, in the presence of news shocks about future productivity and monetary policy. We identify a condition under which these asset prices become more volatile without affecting the volatility of the underlying processes-a positive correlation between news and current shocks. This condition also explains why persistent underlying processes generate volatile asset prices. In addition, we show that the correlation between exchange rate and equity returns depends critically on the currency denomination of the equity return and the monetary policy reaction to productivity shocks. The model we set up does well at matching second moments of exchange rate and equity returns for major floating currencies. 
538 |a Mode of access: Internet 
700 1 |a Matsumoto, Akito. 
700 1 |a Pisani, Massimiliano. 
700 1 |a Rebucci, Alessandro. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2008/284 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2008/284/001.2008.issue-284-en.xml  |z IMF e-Library