BIS’s Shin links dollar strength to global malaise
Head of research outlines how dollar strength affects leverage globally, causing deviations from covered interest parity and potentially impacting growth and trade
The Bank for International Settlements' (BIS) head of research, Hyun Song Shin, extended his ideas on the breakdown of covered interest parity yesterday (November 15), sketching a framework that could solve a range of current economic puzzles.
Shin's recent research has focused on deviations from covered interest parity (CIP), which he described as possibly "the most secure rule in economics" in remarks to the London School of Economics.
CIP holds that arbitrage will eliminate the spread between
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