ABSTRACT
If you have traveled overseas, you are already familiar with exchange rates, the prices at which one country’s money is exchanged for another country’s money. In your travels, you probably viewed changing money as part of the “international experience.” Importers, exporters, and international investors are more likely to see the many dierent moneys as a complication that adds to the cost of international transactions. Evidence suggests that there would be more international trade and international investment if importers, exporters, and investors did not face the cost of having to exchange currencies every time they exchanged products or assets across borders.
