NBER WORKING PAPER SERIES ECONOMIC EFFECTS OF CURRENCY UNIONS Silvana Tenreyro
... of the anchor. These features of the relation between clients and anchors are used to guide the instrumentation. In order to construct the instrument, we use a probit analysis for all country pairings from 1960 to 1997 with six potential anchors that fit the theoretical characterization of Alesina a ...
... of the anchor. These features of the relation between clients and anchors are used to guide the instrumentation. In order to construct the instrument, we use a probit analysis for all country pairings from 1960 to 1997 with six potential anchors that fit the theoretical characterization of Alesina a ...
Economic Effects of Currency Unions ∗ Silvana Tenreyro Robert J. Barro
... West African states have agreed to create a new common currency by the year 2003, and eleven members of the Southern African Development Community are debating whether to adopt the U.S. dollar or to create an independent currency union possibly anchored to the South African rand.2 Finally, six oil-p ...
... West African states have agreed to create a new common currency by the year 2003, and eleven members of the Southern African Development Community are debating whether to adopt the U.S. dollar or to create an independent currency union possibly anchored to the South African rand.2 Finally, six oil-p ...
Exchange Rate Regime Choice with Multiple Key Currencies
... In the empirical section of this paper we test the predictions of our theory with respect to exchange rate regime choice with multiple key currencies. We find that imports from the country issuing the key currency and imports from countries that have already pegged to that currency explain a countr ...
... In the empirical section of this paper we test the predictions of our theory with respect to exchange rate regime choice with multiple key currencies. We find that imports from the country issuing the key currency and imports from countries that have already pegged to that currency explain a countr ...
Thomas Plümper Department of Government, University of Essex Eric Neumayer
... trast, individuals generating income from the production of non-tradable goods and services ought to prefer flexible exchange rates, which allow governments to use monetary policy to stimulate domestic economic activity. As these authors readily admit (e.g., Frieden et al. 2008: 5), their theory la ...
... trast, individuals generating income from the production of non-tradable goods and services ought to prefer flexible exchange rates, which allow governments to use monetary policy to stimulate domestic economic activity. As these authors readily admit (e.g., Frieden et al. 2008: 5), their theory la ...
Macro Conference IV
... Assume: capital stock in each sector consists of traded and nontraded goods combined in fixed proportions. A unit of capital in the traded goods sector consists of TN units of nontraded goods and TT units of traded goods. In the nontraded goods sector capital consists of NN nontraded goods and T ...
... Assume: capital stock in each sector consists of traded and nontraded goods combined in fixed proportions. A unit of capital in the traded goods sector consists of TN units of nontraded goods and TT units of traded goods. In the nontraded goods sector capital consists of NN nontraded goods and T ...
NBER WORKING PAPER SERIES ACTIVITY? A SCENARIO ANALYSIS
... previous economic recoveries, particularly in sectors exposed to foreign competition. Wages have also reacted slowly to changing business conditions. Not surprisingly, politicians and business leaders alike are tempted to support protectionism as an appealing and politically costless recipe to addre ...
... previous economic recoveries, particularly in sectors exposed to foreign competition. Wages have also reacted slowly to changing business conditions. Not surprisingly, politicians and business leaders alike are tempted to support protectionism as an appealing and politically costless recipe to addre ...
Derivatives
... Short Call: Agreed to sell the other party the right to buy the underlying asset, if the other party exercises the option you deliver the asset. Short Put: Agreed to buy the underlying asset from the other party if they decide to exercise the option. ...
... Short Call: Agreed to sell the other party the right to buy the underlying asset, if the other party exercises the option you deliver the asset. Short Put: Agreed to buy the underlying asset from the other party if they decide to exercise the option. ...
This PDF is a selection from an out-of-print volume from the... of Economic Research
... the approximately 5 percent annual inflation rate. Under this circumstance, it is clear that for foreign investors, Korea is an attractive market that has not yet been sufficiently explored. Then the most relevant question to our analysis in this paper is what maintains the high (real) interest rate ...
... the approximately 5 percent annual inflation rate. Under this circumstance, it is clear that for foreign investors, Korea is an attractive market that has not yet been sufficiently explored. Then the most relevant question to our analysis in this paper is what maintains the high (real) interest rate ...
Assessing High House Prices: Bubbles, Fundamentals and
... that is grounded in economic theory. In doing so, we correct four common fallacies about the costliness of the housing market. First, the price of a house is not the same as the annual cost of owning, so it does not necessarily follow from rising prices of houses that ownership is becoming more expe ...
... that is grounded in economic theory. In doing so, we correct four common fallacies about the costliness of the housing market. First, the price of a house is not the same as the annual cost of owning, so it does not necessarily follow from rising prices of houses that ownership is becoming more expe ...
Translation Exposure
... management of a firm; if stockholders do not wish to accept the currency risk of any specific firm, they can diversify their portfolios to manage that risk, investors have already factored the foreign exchange effect into a firm’s market valuation – Currency risk management does not increase the exp ...
... management of a firm; if stockholders do not wish to accept the currency risk of any specific firm, they can diversify their portfolios to manage that risk, investors have already factored the foreign exchange effect into a firm’s market valuation – Currency risk management does not increase the exp ...
interest rate, exchange rate and inflation in romania
... between inflation and a currency against another currency and it is explained the evolution of the exchange rate in the medium and long term. Empirical tests done to demonstrate this theory were numerous, however have provided different results depending on countries and currencies studied, some of ...
... between inflation and a currency against another currency and it is explained the evolution of the exchange rate in the medium and long term. Empirical tests done to demonstrate this theory were numerous, however have provided different results depending on countries and currencies studied, some of ...
Trading forex options on the JSE
... (ie. you never receive the physical foreign currency). All Options are automatically exercised at expiration if they are R 0.01 or more “in-the-money”, ie. if you bought an R 8.50 Call Option and the close-out price was R 8.5001 you would be automatically exercised into the Futures contract at R 8.5 ...
... (ie. you never receive the physical foreign currency). All Options are automatically exercised at expiration if they are R 0.01 or more “in-the-money”, ie. if you bought an R 8.50 Call Option and the close-out price was R 8.5001 you would be automatically exercised into the Futures contract at R 8.5 ...
THE RELATIONSHIP BETWEEN CONSUMER PRICE INDEX (CPI
... However, when the CPI show a change of a significantly different direction compared to the PPI. The reason is the different of definition and uses of the two indices. PPI is use to reduce the revenue streams to get the real picture of output, while the CPI is to describe changes in the cost of livin ...
... However, when the CPI show a change of a significantly different direction compared to the PPI. The reason is the different of definition and uses of the two indices. PPI is use to reduce the revenue streams to get the real picture of output, while the CPI is to describe changes in the cost of livin ...
NBER WORKING PAPER SERIES STRICT DOLLARIZATION AND ECONOMIC PERFORMANCE: AN EMPIRICAL INVESTIGATION
... would have any more credibility than their own embattled Central Bank.5 Comparing economic performance in dollarized countries and in countries with a currency of their own is not an easy task, however. The problem is how to define an appropriate “control” group with which to compare the dollarized ...
... would have any more credibility than their own embattled Central Bank.5 Comparing economic performance in dollarized countries and in countries with a currency of their own is not an easy task, however. The problem is how to define an appropriate “control” group with which to compare the dollarized ...
PDF
... Cymbush® which is imported as a formulated pesticide. Retail price of each of the nine pesticides was determined by surveying pesticide dealers in San Jose City in Nueva Ecija. To derive the price at which the pesticide producer sells the formulated pesticide to the distributor, the marketing margin ...
... Cymbush® which is imported as a formulated pesticide. Retail price of each of the nine pesticides was determined by surveying pesticide dealers in San Jose City in Nueva Ecija. To derive the price at which the pesticide producer sells the formulated pesticide to the distributor, the marketing margin ...
PDF
... the existence of the long-run relationship, standard model selection criteria (e.g., Akaike information criterion (AIC) and Schwartz-Bayesian criterion (SBC)) are used to select the optimum lag length of each first differenced variable in Equation (6) in order to estimate the long-run coefficients a ...
... the existence of the long-run relationship, standard model selection criteria (e.g., Akaike information criterion (AIC) and Schwartz-Bayesian criterion (SBC)) are used to select the optimum lag length of each first differenced variable in Equation (6) in order to estimate the long-run coefficients a ...
House Price Indexes, Approaches and Methods. Abstract
... quality is good and no crossing at revaluation point this method should be satisfactory for index calculation. Firstly this method requiers the valuation to be homogeneous – that is the valuation must be done by mass apprisal models where all properties are valued at the same time. Often this is not ...
... quality is good and no crossing at revaluation point this method should be satisfactory for index calculation. Firstly this method requiers the valuation to be homogeneous – that is the valuation must be done by mass apprisal models where all properties are valued at the same time. Often this is not ...
Purchasing power parity
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Purchasing power parity (PPP) is a component of some economic theories and is a technique used to determine the relative value of different currencies.Theories that invoke purchasing power parity assume that in some circumstances (for example, as a long-run tendency) it would cost exactly the same number of, say, US dollars to buy euros and then to use the proceeds to buy a market basket of goods as it would cost to use those dollars directly in purchasing the market basket of goods.The concept of purchasing power parity allows one to estimate what the exchange rate between two currencies would have to be in order for the exchange to be at par with the purchasing power of the two countries' currencies. Using that PPP rate for hypothetical currency conversions, a given amount of one currency thus has the same purchasing power whether used directly to purchase a market basket of goods or used to convert at the PPP rate to the other currency and then purchase the market basket using that currency. Observed deviations of the exchange rate from purchasing power parity are measured by deviations of the real exchange rate from its PPP value of 1.PPP exchange rates help to minimize misleading international comparisons that can arise with the use of market exchange rates. For example, suppose that two countries produce the same physical amounts of goods as each other in each of two different years. Since market exchange rates fluctuate substantially, when the GDP of one country measured in its own currency is converted to the other country's currency using market exchange rates, one country might be inferred to have higher real GDP than the other country in one year but lower in the other; both of these inferences would fail to reflect the reality of their relative levels of production. But if one country's GDP is converted into the other country's currency using PPP exchange rates instead of observed market exchange rates, the false inference will not occur.