Röthig, Andreas ; Semmler, Willi ; Flaschel, Peter (2005):
Corporate currency hedging and currency crises.
In: Darmstadt Discussion Papers in Economics, 147, Darmstadt, [Report]
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Item Type: | Report |
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Title: | Corporate currency hedging and currency crises |
Language: | English |
Abstract: | We examine the impact of corporate currency hedging on economic stability by introducing hedging activity in a Mundell-Fleming-Tobin framework for analyzing currency and financial crises. The ratio between hedged and unhedged firms is modelled depending on firm size as well as hedging costs. The results indicate that, with an increasing fraction of hedged firms in an economy, the magnitude of a crisis decreases and from a specific hedging level onwards currency crises are ruled out. In order to improve corporate risk management access to hedging instruments should be made possible and hedging costs should be reduced. |
Series: | Darmstadt Discussion Papers in Economics |
Series Volume: | 147 |
Place of Publication: | Darmstadt |
Uncontrolled Keywords: | Mundell-Fleming-Tobin model, currency crises, currency hedging, hedging costs |
Classification DDC: | 300 Sozialwissenschaften > 330 Wirtschaft |
Divisions: | 01 Department of Law and Economics 01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete > Fachgebiet Makroökonomie und Finanzmärkte 01 Department of Law and Economics > Volkswirtschaftliche Fachgebiete |
Date Deposited: | 20 Nov 2008 08:24 |
Last Modified: | 29 Jan 2016 10:24 |
URN: | urn:nbn:de:tuda-tuprints-47795 |
Additional Information: | JEL Classi¯cation: E32, E44, F31, F41 |
URI: | https://tuprints.ulb.tu-darmstadt.de/id/eprint/4779 |
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