This paper employs the opening of the first international telegraph between London and Paris on 13 November 1851 as a unique event that enabled a virtually instantaneous information exchange between the largest financial centers. Before this opening, a London currency speculator comparing the...

Persistent deviations from Uncovered Interest Rate Parity (UIRP) represent a central puzzle in international finance and a key source of currency risk for global investors. This study examines the UIRP puzzle in the JPY/USD market through the lens of financial risk transmission, focusing on how...

This paper examines the role of currency crash risk in explaining the persistent profitability of carry trades. Focusing on the US Dollar-Turkish Lira market, we construct three forwardlooking measures of crash risk: risk reversals, crash probabilities from option-implied distributions, and jump...

This paper examines how carry trade activity affects the transmission of monetary policy in currency markets. It analyzes a set of developed and emerging market currencies against the U.S. dollar. The U.S. dollar appreciates in response to a conventional monetary policy shock but depreciates to...

This paper employs the opening of the first international telegraph between London and Paris on 13 November 1851 as a unique event that enabled a virtually instantaneous information exchange between the largest financial centers. Before this opening, a London currency speculator comparing the...