Corporate Currency Hedging and Currency Crises

Arbeitspapier

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.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Darmstadt Discussion Papers in Economics ; No. 147

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Foreign Exchange ; Financial Markets and the Macroeconomy ; Business Fluctuations; Cycles ; Open Economy Macroeconomics
• Thema: Mundell-Fleming-Tobin model ; currency crises ; currency hedging ; hedging costs ; Währungsmanagement ; Hedging ; Währungskrise ; Finanzmarktkrise ; Mundell-Fleming-Modell ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Röthig, Andreas ; Semmler, Willi ; Flaschel, Peter
• Ereignis: Veröffentlichung
• (wer): Technische Universität Darmstadt, Department of Law and Economics
• (wo): Darmstadt
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/22530
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ