Examining exchange rate return factors before and after
... (CIRP). CIRP states that net returns on an investment that lends at home and borrows abroad (or v. v.) in similar interest generating assets will equal zero, when exchange rate risk is hedged. The conditions of CIRP are the cornerstone riskless no-arbitrage condition in the FX market. This suggests ...
... (CIRP). CIRP states that net returns on an investment that lends at home and borrows abroad (or v. v.) in similar interest generating assets will equal zero, when exchange rate risk is hedged. The conditions of CIRP are the cornerstone riskless no-arbitrage condition in the FX market. This suggests ...
Indian Financial Reforms : National Priorities amidst an International
... one to a more demand-driven, self-sustaining, and market-friendly approach. This change in approach to banking development, Narasimham I argued, was essential for improving the financial sector’s efficiency and effectiveness in responding to the emerging needs of the economy. The main recommendation ...
... one to a more demand-driven, self-sustaining, and market-friendly approach. This change in approach to banking development, Narasimham I argued, was essential for improving the financial sector’s efficiency and effectiveness in responding to the emerging needs of the economy. The main recommendation ...
New Open Economy Macroeconomics
... Despite the prevalence of growing literatures on open economy models as detailed above, the implication of openness in formulating monetary policy in particular is being lately recognized. There is a growing acknowledgement that greater openness certainly affects the conduct of monetary policy. Incr ...
... Despite the prevalence of growing literatures on open economy models as detailed above, the implication of openness in formulating monetary policy in particular is being lately recognized. There is a growing acknowledgement that greater openness certainly affects the conduct of monetary policy. Incr ...
Reaction Functions in a Small Open Economy: What Role for Non
... services that are imported or that are in competition with foreign goods, either in domestic or foreign markets. The non-tradable sector comprises all those goods that do not face foreign competition. ...
... services that are imported or that are in competition with foreign goods, either in domestic or foreign markets. The non-tradable sector comprises all those goods that do not face foreign competition. ...
James Tobin - Prize Lecture
... The historic terrain of macro-economic theory is the explanation of the levels and fluctuations of overall economic activity. Macro-economists have been especially interested in the effects of alternative fiscal, financial, and monetary policies. With the publication of J. M. Keynes’s General Theory ...
... The historic terrain of macro-economic theory is the explanation of the levels and fluctuations of overall economic activity. Macro-economists have been especially interested in the effects of alternative fiscal, financial, and monetary policies. With the publication of J. M. Keynes’s General Theory ...
three myths about canada`s flexible exchange rate
... shocks like the ones we have been disword because it confuses the questionfixing the exchange rate at the appropricussing, a fixed exchange rate would able idea of a currency “misalignment” ate level. The problem is that the terms help to reduce the impact of the Dutch with the perfectly sound idea ...
... shocks like the ones we have been disword because it confuses the questionfixing the exchange rate at the appropricussing, a fixed exchange rate would able idea of a currency “misalignment” ate level. The problem is that the terms help to reduce the impact of the Dutch with the perfectly sound idea ...
Gross National Expenditure Flow of Payments in a Closed Economy
... For many products, there’s no easy answer to the question of who makes it and where is it made. The value in the iPod is in combining inexpensive parts to produce an expensive product. Balance of Payments data may not accurately account for all of payments within and between firms at all stages of t ...
... For many products, there’s no easy answer to the question of who makes it and where is it made. The value in the iPod is in combining inexpensive parts to produce an expensive product. Balance of Payments data may not accurately account for all of payments within and between firms at all stages of t ...
Monetary Policy and the Exchange Rate in
... decisions on the currency composition of their balance sheets. As such, the exchange rate greatly influences the implementation and the impact of monetary policy. This note describes the role of the exchange rate and the exchange rate regime in the monetary policy decisionmaking process and in the r ...
... decisions on the currency composition of their balance sheets. As such, the exchange rate greatly influences the implementation and the impact of monetary policy. This note describes the role of the exchange rate and the exchange rate regime in the monetary policy decisionmaking process and in the r ...
Chapter 12 - Academic Csuohio
... How does this change affect the relative price of assets? • You cannot directly deposit U.S. dollars into a foreign bank, so you convert the $1000 into euros. In September 2002, you receive €1000 to deposit into your German checking account. • In February 2006, you still have €1000, but it will be ...
... How does this change affect the relative price of assets? • You cannot directly deposit U.S. dollars into a foreign bank, so you convert the $1000 into euros. In September 2002, you receive €1000 to deposit into your German checking account. • In February 2006, you still have €1000, but it will be ...
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... principal Asian creditors – Japan, China, Korea, Taiwan – and the principal European creditor Germany, only export manufactures and are themselves major importers of services and raw materials including oil. Thus, their trade (saving) surpluses with the rest of the world, and bilaterally with the Un ...
... principal Asian creditors – Japan, China, Korea, Taiwan – and the principal European creditor Germany, only export manufactures and are themselves major importers of services and raw materials including oil. Thus, their trade (saving) surpluses with the rest of the world, and bilaterally with the Un ...
International Coordination, J. Frankel, Harvard and the NBER Overview
... Examples: Korea’s adjustment of its current account in 1997-9 was 13%!! -- Feasible in Korea, not in Greece, Argentina and other EMs; where income inequality and polarization limit cooperation. • Rentiers would oppose polices inducing lower interest rates, etc. Status Quo Bias: may explain CBs’ unwi ...
... Examples: Korea’s adjustment of its current account in 1997-9 was 13%!! -- Feasible in Korea, not in Greece, Argentina and other EMs; where income inequality and polarization limit cooperation. • Rentiers would oppose polices inducing lower interest rates, etc. Status Quo Bias: may explain CBs’ unwi ...
The Role of Currency Board Regime during Economic Crisis
... Fatas and Rose (2001) add that fixed exchange rate regime is associated with stricter fiscal policy because of the credibility role of economic policy. Since many exchange rate devaluations are associated with fiscal deficit and severe problems of credibility for government and Central Banks, tighte ...
... Fatas and Rose (2001) add that fixed exchange rate regime is associated with stricter fiscal policy because of the credibility role of economic policy. Since many exchange rate devaluations are associated with fiscal deficit and severe problems of credibility for government and Central Banks, tighte ...
The Optimal Level of International Reserves For Emerging Market
... Our paper contributes to a long line of literature on reserves adequacy. The …rst costbene…t analyses of the optimal level of reserves were developed in the 1960s and the 1970s, when the focus was mainly on the current account (Heller, 1966). The main insights from that literature were later formali ...
... Our paper contributes to a long line of literature on reserves adequacy. The …rst costbene…t analyses of the optimal level of reserves were developed in the 1960s and the 1970s, when the focus was mainly on the current account (Heller, 1966). The main insights from that literature were later formali ...
Currency Contracts, Pass-Through, and Devaluation
... the monthly merchandise trade deficit had grown to $663 million from an average of $497 million for the previous six months. A number of factors reinforcedthe pressure on the dollar in January 1973: intensified apprehension over renewed inflationary pressuresin the United States, a sharp drop in U.S ...
... the monthly merchandise trade deficit had grown to $663 million from an average of $497 million for the previous six months. A number of factors reinforcedthe pressure on the dollar in January 1973: intensified apprehension over renewed inflationary pressuresin the United States, a sharp drop in U.S ...
chapter 15 exchange-rate adjustments and the balance of payments
... 1. According to the absorption approach, the economic circumstances that best warrant a currency devaluation is where the domestic economy faces: a. Unemployment coupled with a payments deficit b. Unemployment coupled with a payments surplus c. Full employment coupled with a payments deficit d. Full ...
... 1. According to the absorption approach, the economic circumstances that best warrant a currency devaluation is where the domestic economy faces: a. Unemployment coupled with a payments deficit b. Unemployment coupled with a payments surplus c. Full employment coupled with a payments deficit d. Full ...
... and renewed disinflationary dynamics; we project EURUSD to decline to 1.21 and 1.17 by the end of 2015 and 2016, respectively. The recently conducted stress tests in European banks have put systemic risk factors back on global investors’ radar screens. The fundamental EUR outlook is negative, plague ...
Mr Gramlich gives his views on stabilization policy strategy (Central
... employment around their trend levels, and hence prevent booms or recessions from getting out of hand. When this domestic model is broadened to open the economy to international trade and capital flows, this conclusion no longer holds but the results depend on the flexibility of the nation’s exchange ...
... employment around their trend levels, and hence prevent booms or recessions from getting out of hand. When this domestic model is broadened to open the economy to international trade and capital flows, this conclusion no longer holds but the results depend on the flexibility of the nation’s exchange ...
China, the Eurozone and Global Reserve Currencies 2. Potential
... and Italy is another matter (Münchau, 2010). Contagion, already under way, could be destructive but would not destroy European Monetary Union. The contagion has brought the value of the Euro down – but this is mostly good news for the Eurozone as it is suffering from an overvalued exchange rate at a ...
... and Italy is another matter (Münchau, 2010). Contagion, already under way, could be destructive but would not destroy European Monetary Union. The contagion has brought the value of the Euro down – but this is mostly good news for the Eurozone as it is suffering from an overvalued exchange rate at a ...
direct absorption
... 1) It takes time for domestic producers to expand production of exportables; 2) Orders for imports are normally made well in advance and such contracts are not readily cancelled in the short run; 3) Factories will be reluctant to cancel orders for vital inputs and raw materials; 4) The payments for ...
... 1) It takes time for domestic producers to expand production of exportables; 2) Orders for imports are normally made well in advance and such contracts are not readily cancelled in the short run; 3) Factories will be reluctant to cancel orders for vital inputs and raw materials; 4) The payments for ...
International Coordination - Federal Reserve Bank of San Francisco
... “International monetary cooperation has broken down…The U.S. should worry about the effects of its policies on the rest of the world” (1/30/14). The monetary part of this paper considers both kinds of concerns, represented by currency wars and the taper tantrum. A few scholars have begun to return t ...
... “International monetary cooperation has broken down…The U.S. should worry about the effects of its policies on the rest of the world” (1/30/14). The monetary part of this paper considers both kinds of concerns, represented by currency wars and the taper tantrum. A few scholars have begun to return t ...
WB Credentials (Nov 09)
... The family of OTC derivatives includes is classified by asset class - Interest Rate, FX, Credit, Equity and ...
... The family of OTC derivatives includes is classified by asset class - Interest Rate, FX, Credit, Equity and ...
Foreign-exchange reserves
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Foreign-exchange reserves (also called forex reserves or FX reserves) are assets held by a central bank or other monetary authority, usually in various reserve currencies, mostly the United States dollar, and to a lesser extent the euro, the pound sterling, and the Japanese yen, and used to back its liabilities—e.g., the local currency issued, and the various bank reserves deposited with the central bank by the government or by financial institutions.