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Election Surprises and Exchange Rate Uncertainty
Author(s) -
Garfinkel M. R.,
Glazer A.,
Lee J.
Publication year - 1999
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/1468-0343.00061
Subject(s) - exchange rate , econometrics , economics , monetary economics
This papers shows that unexpected election results explain some of the unexpected variation in foreign exchange rates. The result is based on an event study which examines the behavior of the size of forecast errors implied by futures contracts for exchange rates around elections. Though elections can produce large unexpected effects on exchange rates, the effects on forecast errors are short‐lived. [ JEL codes: D72, F31.]