Thick vs. thin-skinned : technology, news, and financial market reaction / by Barry Eichengreen, Romain Lafarguette and Arnaud Mehl.

By:

Eichengreen, Barry J [author.]

Contributor(s):

Material type: Text

TextSeries: IMF working paper ; WP/17/91.Copyright date: ©2017Publisher: [Washington, D.C.] : International Monetary Fund, [2017]Description: 1 online resource (38 pages) : illustrations, map, tablesContent type:

text

Media type:

computer

Carrier type:

online resource

ISBN:

147559481X
9781475594812

ISSN:

1018-5941

Subject(s):

Genre/Form:

Electronic books.

Additional physical formats: Print version:: Thick vs. Thin-Skinned: Technology, News, and Financial Market ReactionDDC classification:

338.9 23

LOC classification:

HD82 .E53 2017

Online resources:

Click here to access online

Abstract: We study the impact of technology on the reaction of financial markets to information, focusing on the foreign exchange market. We contrast the "thin-skinned" view that technological improvements cause markets to react more to new information with the "thick-skinned" view that they react less. We pinpoint exogenous technological changes using the timing of the connection of countries via the submarine fiber-optic cables used for electronic trading. Cable connections dampen the response of exchange rates to macroeconomic news, consistent with the "thick-skinned" hypothesis. This is in line with the view that technology eases access to information and reduces trend-following behavior. According to our estimates, cable connections reduce the reaction of exchange rates to U.S. monetary policy news by 50 to 80 percent.

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Item type	Home library	Collection	Call number	Materials specified	Status	Date due	Barcode
Electronic-Books	OPJGU Sonepat- Campus	E-Books EBSCO			Available

We study the impact of technology on the reaction of financial markets to information, focusing on the foreign exchange market. We contrast the "thin-skinned" view that technological improvements cause markets to react more to new information with the "thick-skinned" view that they react less. We pinpoint exogenous technological changes using the timing of the connection of countries via the submarine fiber-optic cables used for electronic trading. Cable connections dampen the response of exchange rates to macroeconomic news, consistent with the "thick-skinned" hypothesis. This is in line with the view that technology eases access to information and reduces trend-following behavior. According to our estimates, cable connections reduce the reaction of exchange rates to U.S. monetary policy news by 50 to 80 percent.

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