Premium
Tax wedges, bid‐ask spreads, and international financial parity conditions
Author(s) -
Schnabel Jacques A.
Publication year - 1992
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090130411
Subject(s) - ask price , economics , currency , bid price , monetary economics , interest rate parity , financial economics , finance
Tax wedges do not induce a priori inconsistencies in the international Fisher effect nor do they render forward rates biased predictors of future spot rates once proper account is taken of the bid‐ask spreads present in spot and forward foreign currency transactions.