[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/h/pal/stuchp/978-1-137-42641-3_7.html
   My bibliography  Save this book chapter

UIP, the Carry Trade and Minsky’s Financial Instability Hypothesis in the CEE and CIS

In: Poland and the Eurozone

Author

Listed:
  • Robert Hayward
  • Jens Hölscher
Abstract
The carry trade is the attempt to take advantage of deviations from uncovered interest parity (UIP). UIP asserts that, given the free flow of capital, the expected change in an exchange rate over a specific period should be equal to the interest rate differential for the two currencies for the same period. If this is not the case, there is an opportunity to make an abnormal return, using the carry trade, by borrowing a low interest-rate currency and investing the proceeds in one where rates are relatively high. A large body of evidence suggests that UIP does not hold.

Suggested Citation

  • Robert Hayward & Jens Hölscher, 2014. "UIP, the Carry Trade and Minsky’s Financial Instability Hypothesis in the CEE and CIS," Studies in Economic Transition, in: Jens Hölscher (ed.), Poland and the Eurozone, chapter 7, pages 111-138, Palgrave Macmillan.
    • Handle: RePEc:pal:stuchp:978-1-137-42641-3_7
    DOI: 10.1057/9781137426413_7
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:stuchp:978-1-137-42641-3_7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.