The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Spot and Forward Markets

  • Jacob A. Frenkel
  • Richard M. Levich
Reference work entry


The foreign-exchange market is the market in which currencies of different countries are traded. The market performs two major functions: it facilitates the foreign-exchange needs of exporters and importers, and it enables individuals, corporations and governments to obtain a desired currency mix of their portfolios, both in terms of assets and liabilities.

This is a preview of subscription content, log in to check access.


  1. Fama, E.F., and A. Farber. 1979. Money, bonds and foreign exchange. American Economic Review 69(4): 639–649.Google Scholar
  2. Frankel, J.A. 1982. The search of the exchange rate premium: A six-currency test assuming mean-variance optimization. Journal of International Money and Finance 1: 255–274.CrossRefGoogle Scholar
  3. Frenkel, J.A. 1981. Flexible exchange rates, prices and the role of ‘news’: Lessons from the 1970s. Journal of Political Economy 89(4): 665–705.CrossRefGoogle Scholar
  4. Frenkel, J.A., and R.M. Levich. 1977. Transaction costs and interest arbitrage: Tranquil versus turbulent periods. Journal of Political Economy 85(6): 1209–1226.CrossRefGoogle Scholar
  5. Frenkel, J.A., and M.L. Mussa. 1985. Asset markets, exchange rates and the balance of payments. In Handbook of International Economics, vol. II, ed. R.W. Jones and P.B. Kenen. New York: Elsevier Science Publishers.Google Scholar
  6. Hansen, L.P., and R.S. Hodrick. 1983. Risk averse speculation in the forward exchange market: An econometric analysis of linear models. In Exchange rates and international macroeconomics, ed. J.A. Frenkel. Chicago: University of Chicago Press.Google Scholar
  7. Kubarych, R.M. 1983. Foreign exchange markets in the United States. New York: Federal Reserve Bank of New York.Google Scholar
  8. Levich, R.M. 1985. Empirical studies of exchange rates: Price behavior, rate determination and market efficiency. In Handbook of international economics, vol. II, ed. R.W. Jones and P.B. Kenen. New York: Elsevier Science Publishers.Google Scholar

Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jacob A. Frenkel
    • 1
  • Richard M. Levich
  1. 1.