International investors short the US dollar to buy (or to leverage) risky, high-yielding assets around the globe. What is the economics of carry trades? Recall that UIP states that interest rate...

International investors short the US dollar to buy (or to leverage) risky, high-yielding assets around the globe. What is the economics of carry trades? Recall that UIP states that interest rate differentials between two countries are expected to close when the high-interest-rate currency depreciates against the low-interest-rate currency.