This paper deals with hysteresis in the desired equilibrium exchange rate (DEER) arising from misalignment. When the actual real exchange rate departs from its DEER value, current account realizations--and consequently, debt service obligations--will differ from those assumed in the initial DEER...

Previous studies have found that foreign direct investment is significantly related to the stock of existing investment in the area. The present paper makes an additional contribution by providing evidence that investment decisions are positively correlated to the firm's own previous investment...