Investment and exchange rate uncertainty under different regimes

Detalhes bibliográficos
Autor(a) principal: Oliveira, Cristiano Aguiar de
Data de Publicação: 2014
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Institucional da FURG (RI FURG)
Texto Completo: http://repositorio.furg.br/handle/1/5628
http://dx.doi.org/10.1590/S0101-41612014000300005
Resumo: This paper examines the impact of the exchange rate uncertainty on investment under different exchange rate regimes. The paper presents a theoretical model where exchange rate is a stochastic process and investment decision behaves as a Real Option. The paper evaluates the performance of a new project investment under free float, fixed and intermediate exchange rate regimes (managed float and crawling peg). The comparison among the different regimes shows that the crawling peg has advantages when compared to other regimes. The regime stability implies that less currency devaluations are necessary to stimulate investment, especially when there is a significant loss of market power in foreign markets.
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spelling Investment and exchange rate uncertainty under different regimesExchange rate regimesUncertaintyInvestmentReal optionsRegimes de câmbioIncertezaInvestimentoOpções reaisThis paper examines the impact of the exchange rate uncertainty on investment under different exchange rate regimes. The paper presents a theoretical model where exchange rate is a stochastic process and investment decision behaves as a Real Option. The paper evaluates the performance of a new project investment under free float, fixed and intermediate exchange rate regimes (managed float and crawling peg). The comparison among the different regimes shows that the crawling peg has advantages when compared to other regimes. The regime stability implies that less currency devaluations are necessary to stimulate investment, especially when there is a significant loss of market power in foreign markets.Este artigo estuda o impacto da incerteza a respeito da taxa de câmbio no investimento sob diferentes regimes de câmbio. O artigo apresenta um modelo teórico em que a taxa de câmbio é um processo estocástico e o investimento se comporta como uma opção real. O artigo avalia o desempenho de um novo projeto de investimento sob taxas de câmbio flutuante, fixa e intermediária (flutuação administrada e bandas). A comparação entre os diferentes regimes mostra que o regime de bandas cambiais possui vantagens quando comparados aos outros regimes. A estabilidade do regime implica que menores desvalorizações são necessárias para estimular o investimento, especialmente quando há uma perda significativa de poder de mercado nos mercados externos.2015-12-16T17:24:35Z2015-12-16T17:24:35Z2014info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfOLIVEIRA, Cristiano Aguiar de. Investment and exchange rate uncertainty under different regimes. Revista de estudos econômicos (USP), v. 44, n. 33, p. 553-577, 2014. Acesso em: <http://www.scielo.br/pdf/ee/v44n3/05.pdf>. Disponível em: 11 dez. 2015.0101-4161http://repositorio.furg.br/handle/1/5628http://dx.doi.org/10.1590/S0101-41612014000300005engOliveira, Cristiano Aguiar deinfo:eu-repo/semantics/openAccessreponame:Repositório Institucional da FURG (RI FURG)instname:Universidade Federal do Rio Grande (FURG)instacron:FURG2015-12-16T17:24:35Zoai:repositorio.furg.br:1/5628Repositório InstitucionalPUBhttps://repositorio.furg.br/oai/request || http://200.19.254.174/oai/requestopendoar:2015-12-16T17:24:35Repositório Institucional da FURG (RI FURG) - Universidade Federal do Rio Grande (FURG)false
dc.title.none.fl_str_mv Investment and exchange rate uncertainty under different regimes
title Investment and exchange rate uncertainty under different regimes
spellingShingle Investment and exchange rate uncertainty under different regimes
Oliveira, Cristiano Aguiar de
Exchange rate regimes
Uncertainty
Investment
Real options
Regimes de câmbio
Incerteza
Investimento
Opções reais
title_short Investment and exchange rate uncertainty under different regimes
title_full Investment and exchange rate uncertainty under different regimes
title_fullStr Investment and exchange rate uncertainty under different regimes
title_full_unstemmed Investment and exchange rate uncertainty under different regimes
title_sort Investment and exchange rate uncertainty under different regimes
author Oliveira, Cristiano Aguiar de
author_facet Oliveira, Cristiano Aguiar de
author_role author
dc.contributor.author.fl_str_mv Oliveira, Cristiano Aguiar de
dc.subject.por.fl_str_mv Exchange rate regimes
Uncertainty
Investment
Real options
Regimes de câmbio
Incerteza
Investimento
Opções reais
topic Exchange rate regimes
Uncertainty
Investment
Real options
Regimes de câmbio
Incerteza
Investimento
Opções reais
description This paper examines the impact of the exchange rate uncertainty on investment under different exchange rate regimes. The paper presents a theoretical model where exchange rate is a stochastic process and investment decision behaves as a Real Option. The paper evaluates the performance of a new project investment under free float, fixed and intermediate exchange rate regimes (managed float and crawling peg). The comparison among the different regimes shows that the crawling peg has advantages when compared to other regimes. The regime stability implies that less currency devaluations are necessary to stimulate investment, especially when there is a significant loss of market power in foreign markets.
publishDate 2014
dc.date.none.fl_str_mv 2014
2015-12-16T17:24:35Z
2015-12-16T17:24:35Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv OLIVEIRA, Cristiano Aguiar de. Investment and exchange rate uncertainty under different regimes. Revista de estudos econômicos (USP), v. 44, n. 33, p. 553-577, 2014. Acesso em: <http://www.scielo.br/pdf/ee/v44n3/05.pdf>. Disponível em: 11 dez. 2015.
0101-4161
http://repositorio.furg.br/handle/1/5628
http://dx.doi.org/10.1590/S0101-41612014000300005
identifier_str_mv OLIVEIRA, Cristiano Aguiar de. Investment and exchange rate uncertainty under different regimes. Revista de estudos econômicos (USP), v. 44, n. 33, p. 553-577, 2014. Acesso em: <http://www.scielo.br/pdf/ee/v44n3/05.pdf>. Disponível em: 11 dez. 2015.
0101-4161
url http://repositorio.furg.br/handle/1/5628
http://dx.doi.org/10.1590/S0101-41612014000300005
dc.language.iso.fl_str_mv eng
language eng
dc.rights.driver.fl_str_mv info:eu-repo/semantics/openAccess
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.source.none.fl_str_mv reponame:Repositório Institucional da FURG (RI FURG)
instname:Universidade Federal do Rio Grande (FURG)
instacron:FURG
instname_str Universidade Federal do Rio Grande (FURG)
instacron_str FURG
institution FURG
reponame_str Repositório Institucional da FURG (RI FURG)
collection Repositório Institucional da FURG (RI FURG)
repository.name.fl_str_mv Repositório Institucional da FURG (RI FURG) - Universidade Federal do Rio Grande (FURG)
repository.mail.fl_str_mv
_version_ 1813187238042796032

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