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Title:Information value, export and hedging PDF Logo
Authors:Broll, Udo
Eckwert, Bernhard
Issue Date:2011
Series/Report no.:Dresden discussion paper series in economics 03/11
Abstract:The paper analyzes the interactions between the precision of information, trade and welfare within a decision framework of an exporting firm. Information in a financial market is described in terms of a publicly observable signal. With higher transparency, the signal conveys more precise information about the random foreign exchange rate. More precise information about exchange rate changes has ambiguous effects on trade and welfare which depend critically on technology of the firm and the degree of risk aversion.
Subjects:exchange rate risk
trade
futures market
market transparency
value of information
JEL:F11
F23
G14
G15
Document Type:Working Paper
Appears in Collections:Dresden Discussion Paper Series in Economics, Faculty of Business and Economics, TU Dresden

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