Determinants of Currency Risk Premiums
... assets denominated in other currencies.” However, this was “exactly the opposite of the ‘safe haven’ hypothesis which was frequently offered at that time as an explanation for the dollar’s strength.” Thus, they conclude that it “is hard to see how one could rely on the risk-premium interpretation al ...
... assets denominated in other currencies.” However, this was “exactly the opposite of the ‘safe haven’ hypothesis which was frequently offered at that time as an explanation for the dollar’s strength.” Thus, they conclude that it “is hard to see how one could rely on the risk-premium interpretation al ...
NBER WORKING PAPER SERIES ECONOMIC EFFECTS OF CURRENCY UNIONS Silvana Tenreyro
... different exchange rate regimes on bilateral outcomes. The basic idea is that the characteristics of the exchange rate regime between two countries (exchange rate variability, fixed or float, autonomous or common currencies) are partially related to the independent decisions of these countries to pe ...
... different exchange rate regimes on bilateral outcomes. The basic idea is that the characteristics of the exchange rate regime between two countries (exchange rate variability, fixed or float, autonomous or common currencies) are partially related to the independent decisions of these countries to pe ...
Monetary Policy and the Jamaican Economy
... requirements, the discount rate and special deposits. MacIntosh(1984 ) and Brown(1985) described the evolution of monetary policy during the early 1980s. During this period, monetary policy utilised credit and interest rate controls as against the market mechanism. Currently, the main operating targ ...
... requirements, the discount rate and special deposits. MacIntosh(1984 ) and Brown(1985) described the evolution of monetary policy during the early 1980s. During this period, monetary policy utilised credit and interest rate controls as against the market mechanism. Currently, the main operating targ ...
Economic Effects of Currency Unions ∗ Silvana Tenreyro Robert J. Barro
... (unmeasured) policies to foster integration and facilitate trade. These omitted characteristics could lead to a positive bias in simple OLS estimates. Other omitted variables may cause a downward bias in OLS estimates. As an example, higher levels of monopoly distortion in a country’s economy mean h ...
... (unmeasured) policies to foster integration and facilitate trade. These omitted characteristics could lead to a positive bias in simple OLS estimates. Other omitted variables may cause a downward bias in OLS estimates. As an example, higher levels of monopoly distortion in a country’s economy mean h ...
money and exchange-rate regimes
... the nominal exchange rate, established at the purchasing power parity (PPP) level, need not be altered. From this derives the idea of fast adjustment and of short-run money neutrality. As McKinnon (1988, p. 95) argues: “purchasing power parity can be an unambiguous theoretical guide for central bank ...
... the nominal exchange rate, established at the purchasing power parity (PPP) level, need not be altered. From this derives the idea of fast adjustment and of short-run money neutrality. As McKinnon (1988, p. 95) argues: “purchasing power parity can be an unambiguous theoretical guide for central bank ...
Pegging the future West African single currency in regard to
... African countries would have scarce ability to run an independent monetary policy (as is the case today of the CFA Franc zone countries vis-à-vis France’s monetary policy). The reason for considering the euro and the US dollar as possible anchor currencies is straightforward. We also consider the yu ...
... African countries would have scarce ability to run an independent monetary policy (as is the case today of the CFA Franc zone countries vis-à-vis France’s monetary policy). The reason for considering the euro and the US dollar as possible anchor currencies is straightforward. We also consider the yu ...
NBER WORKING PAPER SERIES Richard Clarida
... desirability of flexible exchange rates. The strict isomorphism result, however, breaks down when we allow for the possibility of international monetary coordination. There are potentially gains from cooperation within our framework, though they are somewhat different in nature than stressed in the t ...
... desirability of flexible exchange rates. The strict isomorphism result, however, breaks down when we allow for the possibility of international monetary coordination. There are potentially gains from cooperation within our framework, though they are somewhat different in nature than stressed in the t ...
Chapter 16: Foreign Exchange Derivative Markets
... Begin with an equilibrium situation and consider what will happen to the U.S. demand for euros and the supply of euros for sale if U.S. inflation suddenly becomes much higher than European inflation. The U.S. demand for European goods will increase, reflecting an increased U.S. demand for euros. In ...
... Begin with an equilibrium situation and consider what will happen to the U.S. demand for euros and the supply of euros for sale if U.S. inflation suddenly becomes much higher than European inflation. The U.S. demand for European goods will increase, reflecting an increased U.S. demand for euros. In ...
Twin Deficit Hypothesis: The Case of Ukraine
... inflation, the inflation tax will obviously be zero, but seigniorage is still being collected unless there is no growth in real cash balances. As a way of budget deficit financing seigniorage revenue has a certain limit. As inflation becomes very high, households may use foreign currency for transac ...
... inflation, the inflation tax will obviously be zero, but seigniorage is still being collected unless there is no growth in real cash balances. As a way of budget deficit financing seigniorage revenue has a certain limit. As inflation becomes very high, households may use foreign currency for transac ...
DP2005/04 Reaction functions in a small open economy: What role for non-traded inflation?
... 3, I estimate the model following the Bayesian methodology developed by Schorfheide (2000) and used in Lubik and Schorfheide (2005). A procedure to test if the model fits the data, based on the comparison between the empirical and the model cross-covariances, is also briefly discussed. Section 4 pre ...
... 3, I estimate the model following the Bayesian methodology developed by Schorfheide (2000) and used in Lubik and Schorfheide (2005). A procedure to test if the model fits the data, based on the comparison between the empirical and the model cross-covariances, is also briefly discussed. Section 4 pre ...
13-102 Fixed Exchange Rates
... economy; the LM curve and FE line are the same – Note that we don’t use the AD-AS model because we need to know what happens to the real interest rate, which has an important impact on the exchange rate – The IS curve is affected because net exports are part of the demand for goods – The IS curve re ...
... economy; the LM curve and FE line are the same – Note that we don’t use the AD-AS model because we need to know what happens to the real interest rate, which has an important impact on the exchange rate – The IS curve is affected because net exports are part of the demand for goods – The IS curve re ...
Should Gold-Exporters Peg Their Currencies to
... prone to in recent years. Of these, monetary independence has traditionally been considered the most important. But the last few decades have seen widespread disillusionment, both among academics and practitioners, with the proposition that governments are in practice able to use discretionary monet ...
... prone to in recent years. Of these, monetary independence has traditionally been considered the most important. But the last few decades have seen widespread disillusionment, both among academics and practitioners, with the proposition that governments are in practice able to use discretionary monet ...
frenchdavis2001financialcrisis_en.pdf
... stock of external liabilities.4 All these macroeconomic variables experienced some overshooting.5 Adjustment was frequently anchored to one dominant balance, which generated imbalances in other macroeconomic variables, as in a falling inflation rate associated with real exchange rate appreciation a ...
... stock of external liabilities.4 All these macroeconomic variables experienced some overshooting.5 Adjustment was frequently anchored to one dominant balance, which generated imbalances in other macroeconomic variables, as in a falling inflation rate associated with real exchange rate appreciation a ...
A simple framework for international monetary policy analysis
... In this paper we revisit these classic issues by developing a simple two-country model that is useful for international policy analysis. Consistent with a voluminous recent literature, our framework is optimization-based and is sufficiently tractable to admit an analytical solution.1 In most of this ...
... In this paper we revisit these classic issues by developing a simple two-country model that is useful for international policy analysis. Consistent with a voluminous recent literature, our framework is optimization-based and is sufficiently tractable to admit an analytical solution.1 In most of this ...
No Slide Title
... between, say, LIFO/FIFO or straight-line/accelerated depreciation: » the choice doesn't affect any real cash flow except for taxes » the only correct method is economic value anyway - Simplicity/consistency: Current rate method. ...
... between, say, LIFO/FIFO or straight-line/accelerated depreciation: » the choice doesn't affect any real cash flow except for taxes » the only correct method is economic value anyway - Simplicity/consistency: Current rate method. ...
Monetary Policy: Can the Federal Reserve
... The Federal Reserve System and Monetary Policy The Federal Reserve System (The Fed) was created by an Act of Congress in 1913. Headed by the Board of Governors in Washington, D.C., it is the central bank of the United States. The Fed’s activities include regulating banking institutions and providing ...
... The Federal Reserve System and Monetary Policy The Federal Reserve System (The Fed) was created by an Act of Congress in 1913. Headed by the Board of Governors in Washington, D.C., it is the central bank of the United States. The Fed’s activities include regulating banking institutions and providing ...
The Zero Bound in an Open Economy: A Foolproof Way of Escaping from
... target (say 2 percent per year). Many central banks already implement such inflation targets. Another possibility is an upward-sloping price-level target path (say rising at 2 percent per year), although there is as yet no central bank that implements explicit price-level targeting (with either a fl ...
... target (say 2 percent per year). Many central banks already implement such inflation targets. Another possibility is an upward-sloping price-level target path (say rising at 2 percent per year), although there is as yet no central bank that implements explicit price-level targeting (with either a fl ...
here
... The relation of prices to the exchange rate was studied with interest during ’60’70-s. Initially models were established that based on the theory “Law of one price” presumed the existence of a unitarian connection between them. Later on there were developed models of the Parity of Buying Power (abso ...
... The relation of prices to the exchange rate was studied with interest during ’60’70-s. Initially models were established that based on the theory “Law of one price” presumed the existence of a unitarian connection between them. Later on there were developed models of the Parity of Buying Power (abso ...
Currency Misalignments and Optimal Monetary Policy: A
... Exchange rates among large economies have fluctuated dramatically over the past 30 years. The dollar/euro exchange rate has experienced swings of greater than 60 percent. Even the Canadian dollar/US dollar exchange rate has risen and fallen by more than 35 percent in the past decade, but inflation r ...
... Exchange rates among large economies have fluctuated dramatically over the past 30 years. The dollar/euro exchange rate has experienced swings of greater than 60 percent. Even the Canadian dollar/US dollar exchange rate has risen and fallen by more than 35 percent in the past decade, but inflation r ...
DP2010/03 Multi-period fixed-rate loans, housing and monetary policy in small open economies
... of the durable sector to interest rate shocks. However, mortgage interest rates often response sluggishly to the official cash rate making monetary stabilisation less efficient (see Kobayashi, 2008, for example). Here we assume full pass-through to the marginal mortgage interest rate but focus on t ...
... of the durable sector to interest rate shocks. However, mortgage interest rates often response sluggishly to the official cash rate making monetary stabilisation less efficient (see Kobayashi, 2008, for example). Here we assume full pass-through to the marginal mortgage interest rate but focus on t ...
Exchange rate and price dynamics in a small open economy
... banks in industrialised countries found themselves confronted with the zero lower bound on nominal interest rates (ZLB). As a consequence, these central banks were unable to respond to further contractionary shocks using their traditional monetary policy instrument of short-term interest rates (Jord ...
... banks in industrialised countries found themselves confronted with the zero lower bound on nominal interest rates (ZLB). As a consequence, these central banks were unable to respond to further contractionary shocks using their traditional monetary policy instrument of short-term interest rates (Jord ...
CHANGES IN THE CHARACTERISTICS OF THE
... fluctuations in the Australian economy. As a mainly commodity-exporting country, the world commodity price cycle dominates large movements in Australia's terms of trade. Prior to the floating of the Australian dollar ($A) in December 1983, income effects generated by these fluctuations contributed t ...
... fluctuations in the Australian economy. As a mainly commodity-exporting country, the world commodity price cycle dominates large movements in Australia's terms of trade. Prior to the floating of the Australian dollar ($A) in December 1983, income effects generated by these fluctuations contributed t ...
NBER WORKING PAPER SERIES ASPECTS OF THE OPTIMAL MANAGEMENT OF EXCHANGE RATES
... equation (14) suggests that the monetary authority possesses two instruments for the attainment of its policy goals: a '' policy--the optimal intervention index and an policy--the optimal stock of money at the beginning of each period. The general optimization procedure would then solve simultaneous ...
... equation (14) suggests that the monetary authority possesses two instruments for the attainment of its policy goals: a '' policy--the optimal intervention index and an policy--the optimal stock of money at the beginning of each period. The general optimization procedure would then solve simultaneous ...
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.