Liquidity risk in banking has been attributed to transactions deposits and their potential to spark runs or panics. We … show instead that transactions deposits help banks hedge liquidity risk from unused loan commitments. Bank stock …-return volatility increases with unused commitments, but the increase is smaller for banks with high levels of transactions deposits …

risks. Portfolios hedging macro uncertainty have historically earned zero or even significantly positive returns, while … uncertainty. The results dictate the role of uncertainty and volatility in structural models and we show they are consistent with … a simple extension of the long-run risk model …

very simple hedging strategies can eliminate more than 80% of the bill volatility that would otherwise occur. Far from … that they would be exposed to risk from fluctuations in their electricity cost. The concern seems to be that a customer … larger than it had budgeted for. I analyze the magnitude of this risk, using demand data from 1142 large industrial customers …

wall are on the verge of being binding, then our results suggest that US coarse grains price volatility in response to corn … on corn previously sold to other uses, as well as acreage devoted to other crops. The US RFS envisions a further boost of … that, in the presence of a binding RFS, the inherent volatility in the US coarse grains market will rise by about one …

, the role of biofuels in determining recent high corn and other agricultural commodity prices, as well as their volatility … industrial demand for corn, contributing to both higher prices and greater price volatility. But turbulence in recent economic …, allowing rents to absorb differences in variations of corn prices versus energy prices. Apparent price volatility seems due to …

volatility on international trade. A common explanation is the availability of hedging instruments. This paper examines the … empirical validity of this explanation using data on over 1,000 country pairs. Which countries have currency hedging instruments …. There are two main findings. First, there is no evidence in the data to support the validity of the hedging hypothesis …

This paper uses a dynamic optimization model to estimate the welfare gains of hedging against commodity price risk for … commodity-exporting countries. We show that the introduction of hedging instruments such as futures and options enhances … domestic welfare through two channels. First, by reducing export income volatility and allowing for a smoother consumption path …

respond quickly to favorable demand realizations and to limit the risk of unprofitably large quantities during low demand … periods. Fast transport thus provides firms with a real option to smooth demand volatility. The model predicts that the … likelihood and extent to which firms employ air shipments is increasing in the volatility of demand they face, decreasing in the …

observation, this paper highlights some of the desirable features of insurance and hedging instruments against capital flow … volatility, and discusses steps to facilitate the creation of these markets …