Predicting Currency Fluctuations and Crises Do Resident Firms Have an Informational Advantage?
Predicting Currency Fluctuations and Crises: Do Resident Firms Have an Informational Advantage?

December 1999 - Markets have had limited success predicting crises and might do better by drawing on private information available to resident enterprise managers, who seem to know better than markets about future movements in exchange rates. Kaufmann, Mehrez, and Schmukler investigate whether resid...

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Bibliographische Detailangaben
1. Verfasser: Schmukler, Sergio (VerfasserIn)
Format: Elektronisch E-Book
Sprache:English
Veröffentlicht: Washington, D.C The World Bank 1999
Schlagworte:
Asymmetric Information
Balance Of Payments
Balance Of Payments Crises
Currencies and Exchange Rates
Currency
Debt Markets
Devaluation
E-Business
Emerging Markets
Exchange
Exchange Rate
Finance and Financial Sector Development
Financial Crises
Financial Literacy
Financial Markets
Future
Interest
Interest Rate
Interest Rate Differentials
International Cred International Financial Markets
Investors
Local Business
Local Investors
Mutual Funds
Private Sector Development
Sovereign Debt
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Zusammenfassung:December 1999 - Markets have had limited success predicting crises and might do better by drawing on private information available to resident enterprise managers, who seem to know better than markets about future movements in exchange rates. Kaufmann, Mehrez, and Schmukler investigate whether resident enterprise managers have an informational advantage about the countries in which they work. They propose a method for extracting information available to resident managers but unknown to investors and forecasters. They test their hypothesis of informational advantage using a unique data set, the Global Competitiveness Survey. The survey asks local managers about their outlook for the country in which they reside. They find that local managers do have useful private information. Local managers' responses improve on conventional forecasts of future volatility and changes in the exchange rate, which are based on economic fundamentals or interest rate differentials. They find that the local business community perceived in advance the recent crises in the Republic of Korea, Russia, and Thailand, but not those in Indonesia and Malaysia. Markets have had limited success predicting crises and might do better by drawing on private information available to resident enterprise managers, who seem to know better than markets about future movements in exchange rates. This paper - a product of Governance, Regulation, and Finance, World Bank Institute - is part of a larger effort in the institute to understand the roles of transparency and governance. The authors may be contacted at dkaufmann@worldbank.org, mehrezg@gunet.georgetown.edu, or sschmukler@worldbank.org
Beschreibung:Weitere Ausgabe: Schmukler, Sergio: Predicting Currency Fluctuations and Crises
Beschreibung:1 Online-Ressource (1 online resource (40 p.))
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