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Publications by Type: Book Chapter

1988
Frankel, J., and K.A. Froot. “Explaining the Demand for Dollars: International Rates of Return, and the Expectations of Chartists and Fundamentalists.” In Macroeconomics, Agriculture, and the Exchange Rates, edited by R. Chambers and P. Paarlberg, 25–88. Boulder: Westview Press, 1988. Explaining the Demand for Dollars: International Rates of Return, and the Expectations of Chartists and Fundamentalists
1990
Froot, K.A. “Multinational Corporations, Exchange Rates, and Direct Investment.” In International Policy Coordination and Exchange Rate Fluctuations, edited by W. Branson, J. Frankel, and M. Goldstein. Chicago: University of Chicago Press, 1990. Multinational Corporations, Exchange Rates, and Direct Investment
1992
Froot, Kenneth A. “U.S.-Japan Trade Today.” In U.S.-Japan Economic Forum, edited by M. Feldstein and Y. Kosai. Vol. 2. Cambridge: National Bureau of Economic Research, 1992.
Froot, K.A., K. Rogoff, and S. Fischer. “The EMS, the EMU and the Transition to a Common Currency.” In Macroeconomics Annual 1991, edited by O. Blanchard, 269–327. Cambridge: MIT Press, 1992. Publisher's Version The EMS, the EMU, and the Transition to a Common Currency

Revised from NBER Working Paper No. 3684, January 1992.

1993
Froot, K.A., B. Yoffie, and M. Kahler. “Trading Blocs and the Incentive to Protect: Implications for Japan and East Asia.” In Regionalism and Rivalry: Japan and the United States in Pacific Asia, edited by J. Frankel, 125–156. Chicago: University of Chicago Press, 1993. Trading Blocs and the Incentive to Protect: Implications for Japan and East Asia
1994
Froot, Kenneth A., and John Y. Campbell. “International Experiences with Securities Transaction Taxes.” In The Internationalization of Equity Markets, edited by J. Frankel, 277-308. Chicago and London: University of Chicago Press, 1994. International Experiences with Securities Transaction Taxes

Revised from NBER Working Paper No. 4587, December 1993; also featured in The NBER Digest, May 1994.

“Introduction and Overview: The Transition Economies of Eastern Europe.” In The Transition in Eastern Europe (Restructuring), 2:1-18. Chicago: University of Chicago Press, 1994. Introduction and Overview: The Transition Economies of Eastern Europe
Froot, K.A., and J. Campbell. “Securities Transaction Taxes: What about International Experiences Migrating Markets?” In Securities Transaction Taxes: False Hopes and Unintended Consequences. Chicago: Irwin Professional Publishing, 1994. Publisher's Version Securities Transaction Taxes: What about International Experiences and Migrating Markets?
Froot, Kenneth A., and J. Sachs. “Foreign Direct Investment in Eastern Europe: Some Economic Considerations.” In In The Transition in Eastern Europe (Restructuring), edited by O. Blanchard and K. Froot, 2:293-318. Chicago: University of Chicago Press, 1994. Foreign Direct Investment in Eastern Europe: Some Economic Considerations
1995
Froot, K.A., and K. Rogoff. “Perspectives on PPP and Long-Run Real Exchange Rates. Chap. 32.” In Handbook of International Economics, 1647–1688. Science Direct, 1995. Publisher's VersionAbstract

This chapter presents an overview of the long-run determinants of purchasing power parity (PPP). It reviews the huge time series literature testing simple PPP. This area has proven fruitful ground for applying modern methods for dealing with nonstationary and near-nonstationary time series. The chapter traces out the evolution of the literature from naive static tests of PPP to modern unit-root approaches for testing whether real exchange rates are stationary and to cointegration techniques—the most recent phase of PPP testing. The research on more disaggregated price data is discussed in the chapter, including a nearly two-hundred year data set on commodity prices in England and France during the seventeenth and eighteenth centuries. Aside from providing an extremely long data set, this historical data offers some perspective on the behavior of cross-country relative prices in more modern times. The chapter looks at some possible medium- and long-run determinants of the real exchange rate, particularly the supply-side determinants emphasized in the popular Balassa–Samuelson model. It also considers some evidence that positive demand shocks, such as unexpected increases in government spending, lead to medium-run appreciations of the real exchange rate.

Perspectives on PPP and Long-Run Real Exchange Rates
Froot, Kenneth A., J. Hines, and G. Hubbard. “The Tax Treatment of Interest and the Operations of U.S. Multinationals.” In Taxing Multinational Corporations, edited by M. Feldstein, 81–93. Chicago: University of Chicago Press, 1995. The Tax Treatment of Interest and the Operations of U.S. Multinationals
“Incentive Problems in Financial Contracting: Impacts on Corporate Financing, Investment & Risk Management Policies.” In The Global Financial System: A Functional Perspective, 225-261, 1995, 225-261. Incentive Problems in Financial Contracting: Impacts on Corporate Financing, Investment, and Risk Management Policies

Edited by K. Froot, D. Crane, S. Mason, A. Perold, R. Merton, Z. Bodie, E. Sirri and P. Tufano, Boston: Harvard Business School Press, 1995, Chapter 7, 225-261. (Revised from Harvard Business School Working Paper no. 95-020.)

Froot, K.A., J. Hines, and G. Hubbard. “Interest Allocation Rules, Financing Patterns, and the Operations of US Multinationals.” In The Effects of Taxation on Multinational Corporations, edited by M. Feldstein, 277–307. Chicago: University of Chicago Press, 1995. Interest Allocation Rules, Financing Patterns, and the Operations of US Multinationals

Also featured in The NBER Digest, November 1994. Revised from NBER Working Paper No. 4924.

1998
Froot, Kenneth A. “Comment on: Regional Patterns in the Law of One Price.” In , 184-186. Chicago and London: University of Chicago Press, 1998. Comment on: Regional Patterns in the Law of One Price
1999
Froot, K.A. “The Limited Financing of Catastrophe Risk: An Overview.” In The Financing of Catastrophe Risk, 1-22. Chicago: University of Chicago Press, 1999. The Limited Financing of Catastrophe Risk: An Overview

Revised from NBER Working Paper No. 6025, May 1997, and HBS Working Paper No. 98-023, September 1997.

Froot, K.A., and P. O'Connell. “The Pricing of US Catastrophe Reinsurance.” In The Financing of Catastrophe Risk, 195–232. Chicago: University of Chicago Press, 1999. The Pricing of US Catastrophe Reinsurance

Revised from NBER Working Paper No. 6043, May 1997, and HBS Working Paper No. 98-018, September 1997.

2010
Froot, Kenneth A. “Lessons from Catastrophe Reinsurance. Chap. 20.” In The Irrational Economist: Making Decisions in a Dangerous World, 171–182. New York: PublicAffairs Books, 2010. Publisher's VersionAbstract

Of the 20 most costly catastrophes since 1970, more than half have occurred since 2001. Is this an omen of what the 21st century will be? How might we behave in this new, uncertain, and more dangerous environment? Will our actions be rational or irrational? A select group of scholars, innovators, and Nobel Laureates was asked to address challenges to rational decision making both in our day-to-day life and in the face of catastrophic threats such as climate changes, natural disasters, technological hazards, and human malevolence. At the crossroads of decision sciences, behavioral and neuro-economics, psychology, management, insurance, and finance, their contributions aim to introduce readers to the latest thinking and discoveries. The Irrational Economist challenges the conventional wisdom about how to make the right decisions in the new era we have entered. It reveals a profound revolution in thinking as understood by some of the greatest minds in our day and underscores the growing role and impact of economists and other social scientists as they guide our most important personal and societal decisions.