A Macroeconomic Theory of the Open Economy
... • Capital flight is a large and sudden reduction in the demand for assets located in a country. • Capital flight has its largest impact on the country from which the capital is fleeing, but it also affects other countries. • If investors become concerned about the safety of their investments, capita ...
... • Capital flight is a large and sudden reduction in the demand for assets located in a country. • Capital flight has its largest impact on the country from which the capital is fleeing, but it also affects other countries. • If investors become concerned about the safety of their investments, capita ...
Loanable Funds
... and services of one country for the goods and services of another. The real exchange rate compares the prices of domestic goods and foreign goods in the domestic economy. ...
... and services of one country for the goods and services of another. The real exchange rate compares the prices of domestic goods and foreign goods in the domestic economy. ...
Exchange rate or inflation targeting in monetary policy?
... exchange market can cause instability in the economy. Studies suggest that foreign exchange markets are often characterized by herd behaviour and that a currency’s exchange rate does not always reflect the economic fundamentals it is supposed to. Fixed exchange rates, which rule out internal fluctua ...
... exchange market can cause instability in the economy. Studies suggest that foreign exchange markets are often characterized by herd behaviour and that a currency’s exchange rate does not always reflect the economic fundamentals it is supposed to. Fixed exchange rates, which rule out internal fluctua ...
Document
... The Asymmetric Position of the Reserve Center • The reserve-issuing country can use its monetary policy for macroeconomic stabilization even though it has fixed exchange rates. • The purchase of domestic assets by the central bank of the reverse currency country leads to: – Excess demand for forei ...
... The Asymmetric Position of the Reserve Center • The reserve-issuing country can use its monetary policy for macroeconomic stabilization even though it has fixed exchange rates. • The purchase of domestic assets by the central bank of the reverse currency country leads to: – Excess demand for forei ...
The Bretton Woods Institutions: Governance without Legitimacy
... Recall that, taking into account the role of quotas in the IMF, the QFRG was requested to review whether the current quota formulas are adequate and also whether the variables in the formulas reasonably reflect the main features of the world economy. On the whole, the proposal for the revision of q ...
... Recall that, taking into account the role of quotas in the IMF, the QFRG was requested to review whether the current quota formulas are adequate and also whether the variables in the formulas reasonably reflect the main features of the world economy. On the whole, the proposal for the revision of q ...
Document
... the foreign entity’s financial statements are presented as they would have been had the U.S. dollar been used to record the transactions in the local currency as they occurred ...
... the foreign entity’s financial statements are presented as they would have been had the U.S. dollar been used to record the transactions in the local currency as they occurred ...
! Export Supply and Import Demand Models for the Turkish Economy
... real income. After estimating the export and import demand functions, economic inferences are being made. For instance, a well-known statement in the trade literature, called MarshallLerner-(Robinson) Condition says that ‘a depreciation or devaluation of a country’s currency will improve its curren ...
... real income. After estimating the export and import demand functions, economic inferences are being made. For instance, a well-known statement in the trade literature, called MarshallLerner-(Robinson) Condition says that ‘a depreciation or devaluation of a country’s currency will improve its curren ...
J. Richardson
... McCulloch, Clas Wihlborg, and John Williamson for many insightful comments and corrections. They should be implicated in any appreciation but not in any dismay. I also gratefully acknowledge the support of the National Science Foundation Grant PRA—81l61459 to the National Bureau of Economic Research ...
... McCulloch, Clas Wihlborg, and John Williamson for many insightful comments and corrections. They should be implicated in any appreciation but not in any dismay. I also gratefully acknowledge the support of the National Science Foundation Grant PRA—81l61459 to the National Bureau of Economic Research ...
Soln Ch 14 Yld Curve
... short rates. An upward sloping curve is explained by expected future short rates being higher than the current short rate. A downward-sloping yield curve implies expected future short rates are lower than the current short rate. Thus bonds of different maturities have different yields if expectation ...
... short rates. An upward sloping curve is explained by expected future short rates being higher than the current short rate. A downward-sloping yield curve implies expected future short rates are lower than the current short rate. Thus bonds of different maturities have different yields if expectation ...
NBER WORKING PAPER SERIES FINANCIAL POLICY AND SPECULATIVE ARGENTINA 1979-1981
... Stabilization in the Southern Cone (RPO672-85). Helpful discussions with Chris Harris, John Huizinga, Graciela Kaminsky, and seminar participants at Columbia University, the International Monetary Fund and the University of Chicago are gratefully acknowledged. The views expressed in this paper are o ...
... Stabilization in the Southern Cone (RPO672-85). Helpful discussions with Chris Harris, John Huizinga, Graciela Kaminsky, and seminar participants at Columbia University, the International Monetary Fund and the University of Chicago are gratefully acknowledged. The views expressed in this paper are o ...
32_4E
... • Capital flight has its largest impact on the country from which the capital is fleeing, but it also affects other countries. • If investors become concerned about the safety of their investments, capital can quickly leave an economy. • Interest rates increase and the domestic currency depreciates. ...
... • Capital flight has its largest impact on the country from which the capital is fleeing, but it also affects other countries. • If investors become concerned about the safety of their investments, capital can quickly leave an economy. • Interest rates increase and the domestic currency depreciates. ...
The Market for Foreign
... • Capital flight has its largest impact on the country from which the capital is fleeing, but it also affects other countries. • If investors become concerned about the safety of their investments, capital can quickly leave an economy. • Interest rates increase and the domestic currency depreciates. ...
... • Capital flight has its largest impact on the country from which the capital is fleeing, but it also affects other countries. • If investors become concerned about the safety of their investments, capital can quickly leave an economy. • Interest rates increase and the domestic currency depreciates. ...
3 - Munich Personal RePEc Archive
... The main exogenous propagation mechanism considered in this paper is shocks to the efficiency in the production of next period’s capital goods - or investment-specific technology shocks. To take account of this unique measure of productivity innovation investment in machinery and equipment - which i ...
... The main exogenous propagation mechanism considered in this paper is shocks to the efficiency in the production of next period’s capital goods - or investment-specific technology shocks. To take account of this unique measure of productivity innovation investment in machinery and equipment - which i ...
Openness in Goods and Financial Markets
... Why would any one country be reluctant to expand domestic demand? What would be the impact on the trade balance if all countries increased domestic demand together? Econ 302 ...
... Why would any one country be reluctant to expand domestic demand? What would be the impact on the trade balance if all countries increased domestic demand together? Econ 302 ...
Net Capital Outflow
... directly influences the quantity of goods and services that a country imports or exports. • Tariff: A tax on an imported good. • Import quota: A limit on the quantity of a good produced abroad and sold domestically. ...
... directly influences the quantity of goods and services that a country imports or exports. • Tariff: A tax on an imported good. • Import quota: A limit on the quantity of a good produced abroad and sold domestically. ...
32 - Mersin
... directly influences the quantity of goods and services that a country imports or exports. • Tariff: A tax on an imported good. • Import quota: A limit on the quantity of a good produced abroad and sold domestically. ...
... directly influences the quantity of goods and services that a country imports or exports. • Tariff: A tax on an imported good. • Import quota: A limit on the quantity of a good produced abroad and sold domestically. ...
Introduction to Macroeconomics
... Purchasing Power = the quantity of goods and services that can be purchased with a given amount of money; the value of money. ...
... Purchasing Power = the quantity of goods and services that can be purchased with a given amount of money; the value of money. ...
Week 5
... domestic investors lend abroad minus the amount that foreign investors lend to the U.S. It may be positive or negative. In a small open economy, investment (capital) flows in and out of a country freely at a fixed world interest rate. In the large open economy model the interest rate r is largely a ...
... domestic investors lend abroad minus the amount that foreign investors lend to the U.S. It may be positive or negative. In a small open economy, investment (capital) flows in and out of a country freely at a fixed world interest rate. In the large open economy model the interest rate r is largely a ...
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.