Article | American Economic Review | March 1987

Using Survey Data to Test Standard Propositions Regarding Exchange Rate Expectations

by J. Frankel and K. A. Froot

Keywords: Currencies; Exchange rates; asset pricing; International macroeconomics; monetary policy; Currency controls; Fixed exchange rates; Floating exchange rates; Currency bands; Currency zones; Currency areas; rational expectations; Data and Data Sets; Finance;

Format: Print

21 pages

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Citation:

Frankel, J., and K. A. Froot. "Using Survey Data to Test Standard Propositions Regarding Exchange Rate Expectations." American Economic Review 77, no. 1 (March 1987): 133–153. (Revised from NBER Working Paper No. 1672.)

UAL is a large air transportation company with roots that go back to the 1920s. As a legacy carrier, going back to before the 1978 deregulation of air transportation markets, United Airlines is burdened with cost structures that make it difficult to compete with newer competitors. In addition, UAL has the burden of $7.6 billion in unfunded pension obligations and $2 billion in unfunded retiree health obligations. In June 2004, UAL is still operating under Chapter 11 bankruptcy protection, which began December 2002. It has needed extensions of the exclusivity period from the bankruptcy court. UAL's plan of reorganization is predicated on receiving $1.8 billion in loan guarantees from the Air Transport Stabilization Board (ATSB). But its request for loan guarantees from the ATSB was recently rejected. The company must decide what to do next and how to emerge from bankruptcy.

Kishore Karunakaran, President and COO of FFCM, faces a variety of challenges in launching an innovative investment management business in the rapidly evolving ETF space.

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