Chernov, Mikhail; Haddad, Valentin; Itskhoki, Oleg - National Bureau of Economic Research - 2024
Financial markets play two roles with implications for the exchange rate: they accommodate risk sharing and act as a … indicate that full market segmentation is not necessary for financial shocks to explain exchange rates. Moreover, financial … markets can accommodate a significant extent of international risk sharing without leading to the classic exchange rate …