Interest rate parity
Balance of payments
Sterilization (economics)
Foreign exchange risk
Foreign exchange market
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The main theories of international finance include exchange rate dynamics, policy pre-announcement, currency crises, intertemporal optimizing model, exchange rate target zones, open economy endogenous growth, new open economy, game theories, national income accounting, balance of payments, asset approach to exchange rates, money, interest rates, price levels, output and the exchange rate, fixed exchange rates, foreign exchange intervention, international monetary systems, financial globalization, optimum currency areas, and developing countries' growth and reform . These theories cover a wide range of topics such as exchange rates, balance of payments, financial globalization, and the implications of international financial integration . They provide a comprehensive framework for understanding international finance and its impact on economies and markets .
Related Questions
What are the key economic theories that underpin the relationship between international trade and economic growth?5 answersThe relationship between international trade and economic growth is underpinned by several key economic theories. The neoclassical growth model emphasizes exogenous equilibrium growth, while endogenous growth theory highlights the endogenous determination of technical progress as a primary growth source. Additionally, the impact of international trade on economic growth is explored, with trade leading to specialization, productivity growth, and a positive feedback loop between economic growth and trade. Furthermore, the Pedroni panel cointegration test reveals a long-term cointegrated relationship between international trade and economic growth in ASEAN countries, with foreign direct investment also positively impacting growth. Adam Smith's insights on learning by doing and economies-of-scale are crucial for explaining long-run economic growth and the increase in international trade.What are the most relevant theories about foreign direct investment?4 answersThe most relevant theories about foreign direct investment (FDI) include the monopolistic advantage theory, internalization theory, OLI paradigm, product life cycle theory, transnational companies and monopolistic computation theory, generalized theory of economic development, competitive advantage of nation's theory, eclectic paradigm and country's investment development theory, and the differential model of capital distribution between countries. These theories explain the determinants of FDI, such as firm-specific advantages, internalization, location advantages, and the impact of FDI on the economy of both the host and the issuer countries. However, there are gaps in the literature, particularly in explaining the phenomenon of emerging market multinational enterprises and the internationalization of the service industry. Additionally, there are theoretical inconsistencies and inconclusive empirical results within and among different groups of financial theories on FDI. Future research should consider context-specific inclusion of financial factors until the efficiency of financial markets is settled.What are the most important theories about foreign direct investment?4 answersThe most important theories about foreign direct investment (FDI) include theories related to imperfections in capital markets, exchange rate variables, portfolio theory, behavioral finance, and the internationalization path of financially disadvantaged multinationals. These theories have been developed and analyzed in various articles and books, but there is no single theory that fully explains the determinants of FDI. Theories such as the theory of economic advantage and the Product Life Cycle Theory have been suggested as starting points for understanding FDI flows. Additionally, the role of human capital in stimulating FDI and vice versa has been recognized as a crucial determinant for attracting the right mode of foreign capital. However, the direct impacts of FDI in developed countries are inconclusive, while there is more agreement on the positive effects of FDI in economic development and human capital in transition and undeveloped economies.What are the interesting theories about financial mathematics?5 answersFinancial mathematics encompasses various interesting theories. One theory focuses on the interest rate of return and present value, which includes concepts such as compound interest, annuities, and loans. Another theory is the capital asset pricing model, which examines the relationship between risk and return in the valuation of assets. Financial mathematics also involves stochastic optimal control theory, which analyzes decision-making under uncertainty and its application in the financial field. Probability theory plays a crucial role in financial mathematics, providing methods for analyzing random variables, distributions, and simulation techniques. Additionally, non-linear pricing theory and backward stochastic differential equations are explored in financial mathematics to understand market imperfections and equilibrium. These theories contribute to the development and innovation of financial instruments and have a significant impact on the modern financial market.What is one of the most important topic in international finance that is least talk about?5 answersOne of the most important topics in international finance that is least talked about is the governance of financial systems. While there has been significant focus on international financial standards and their nature as "soft law", the study of the financial sector of the global economy has been largely left to specialists in international economics, financial journalists, and international financial practitioners. The interconnectedness of the financial world and the impact of shocks on institutions and markets globally highlight the need for better data and information on aggregate positions and linkages. The academic literature on the governance of financial systems has become problem-centered, focusing on preventing and managing financial crises and understanding the increased complexity of financial systems. This suggests that there is a need for more attention and research on the governance of financial systems in the field of international political economy.
