Simple monetary policy rules and exchange rate uncertainty Kai Leitemo Ulf S¨
... between domestic and foreign goods, and thus contributes to the aggregate demand channel; (ii ) the exchange rate affects consumer prices directly via the domestic currency price of imports; and (iii ) the exchange rate affects the price of imported intermediate goods, and thus the pricing decisions o ...
... between domestic and foreign goods, and thus contributes to the aggregate demand channel; (ii ) the exchange rate affects consumer prices directly via the domestic currency price of imports; and (iii ) the exchange rate affects the price of imported intermediate goods, and thus the pricing decisions o ...
NBER WORKING PAPER SERIES Richard Clarida Daniel Waldman
... long run to an inflation shock, even though on impact it can appreciate in response to this shock. We show that in a traditional overshooting model in which the central bank sets a growth rate for the money stock, the exchange rate would be expected depreciate in response to an inflation shock. The ...
... long run to an inflation shock, even though on impact it can appreciate in response to this shock. We show that in a traditional overshooting model in which the central bank sets a growth rate for the money stock, the exchange rate would be expected depreciate in response to an inflation shock. The ...
Essays on Monetary Economics DEPARTMENT OF ECONOMICS UNIVERSITAT POMPEU FABRA
... the expected discounted valué of their utiüty flow. I assume that the production units are imperfectly competitive and at each point in time, each domestic producer is allowed to reset its price with a constant probabiüty, independently of the time elapsed since the last adjustment. There are shocks ...
... the expected discounted valué of their utiüty flow. I assume that the production units are imperfectly competitive and at each point in time, each domestic producer is allowed to reset its price with a constant probabiüty, independently of the time elapsed since the last adjustment. There are shocks ...
Macroeconomic Review April 2017 Vol XVI Issue 1
... commemorative article. Box C presents a historical narrative of the currency arrangements in both territories that led to the Agreement, and explains why currency interchangeability has worked well for Singapore and Brunei. We would like to thank Mr Freddy Orchard for his comments on the article. Al ...
... commemorative article. Box C presents a historical narrative of the currency arrangements in both territories that led to the Agreement, and explains why currency interchangeability has worked well for Singapore and Brunei. We would like to thank Mr Freddy Orchard for his comments on the article. Al ...
Free Full Text ( Final Version , 406kb )
... the British government later. When we look back now, we can simply find two main reasons for euro’s decline during that period of time (Soper, 2001). In the first place, the economic growth rate in the United States was quicker than that in the euro zone at that moment. As a result of this, vast cap ...
... the British government later. When we look back now, we can simply find two main reasons for euro’s decline during that period of time (Soper, 2001). In the first place, the economic growth rate in the United States was quicker than that in the euro zone at that moment. As a result of this, vast cap ...
Engineering Good Times: Fiscal Manipulation in a Global Economy
... terms of trade—the unit price of a country’s exports relative to the unit price of its imports. High levels of trade do not necessarily lead to greater terms of trade volatility, 20 but in the absence of trade, such volatility would have no impact on the economy.21 Empirically, scholars have found ...
... terms of trade—the unit price of a country’s exports relative to the unit price of its imports. High levels of trade do not necessarily lead to greater terms of trade volatility, 20 but in the absence of trade, such volatility would have no impact on the economy.21 Empirically, scholars have found ...
Macroeconomic Determination of Prices of Agricultural and Mineral
... A 3rd channel goes the same direction -trading in contracts (“the carry trade”): Low interest rates induce a “search for yield” among investors, who go long in commodities (just as FX, emerging markets., etc.) ...
... A 3rd channel goes the same direction -trading in contracts (“the carry trade”): Low interest rates induce a “search for yield” among investors, who go long in commodities (just as FX, emerging markets., etc.) ...
WPS2398 - World bank documents
... foreign real interest rates, slowdown in the growth rate of industrial countries, and the secular decline in the terms of trade) as well as domestic factors (as represented by increasing fiscal deficits and real exchange rate appreciation) were relevant in explaining the deterioration of the current ...
... foreign real interest rates, slowdown in the growth rate of industrial countries, and the secular decline in the terms of trade) as well as domestic factors (as represented by increasing fiscal deficits and real exchange rate appreciation) were relevant in explaining the deterioration of the current ...
International Competitiveness and Comparative Advantage: A
... those of an international competitor, irrespective of what the sources of the cost advantage are. The source of that advantage can be the abundance (cheapness) of either primary or intermediate inputs (extended Heckscher-Ohlin), or the use of different technology (Ricardo), or the production at lar ...
... those of an international competitor, irrespective of what the sources of the cost advantage are. The source of that advantage can be the abundance (cheapness) of either primary or intermediate inputs (extended Heckscher-Ohlin), or the use of different technology (Ricardo), or the production at lar ...
Quality, Trade, and Exchange Rate Pass-Through
... empirical research typically …nds that the pass-through of exchange rate changes to domestic prices is incomplete (or, in other words, import prices do not fully adjust to exchange rate changes). 12 A challenge for both economists and policymakers is to understand the reasons for incomplete passthr ...
... empirical research typically …nds that the pass-through of exchange rate changes to domestic prices is incomplete (or, in other words, import prices do not fully adjust to exchange rate changes). 12 A challenge for both economists and policymakers is to understand the reasons for incomplete passthr ...
Working Paper No. 405 Monetary policy, capital
... A simple look at the data does not allow us to assess which of the two explanations is correct. Because the crisis is still ongoing, there are not yet many studies trying to disentangle its causes and quantify the relative contribution of different factors. In a recent speech, Bernanke (2010) discus ...
... A simple look at the data does not allow us to assess which of the two explanations is correct. Because the crisis is still ongoing, there are not yet many studies trying to disentangle its causes and quantify the relative contribution of different factors. In a recent speech, Bernanke (2010) discus ...
RMB as an Anchor Currency in ASEAN, China, Japan
... for the international monetary system, the internationalization of the RMB is still at an early stage. The international use of RMB is still limited by certain aspects, such as its weight in global trade and financial transactions, foreign exchange reserves and other measures. This contrasts with Ch ...
... for the international monetary system, the internationalization of the RMB is still at an early stage. The international use of RMB is still limited by certain aspects, such as its weight in global trade and financial transactions, foreign exchange reserves and other measures. This contrasts with Ch ...
The Uses of Money: Money in the Theory of an Exchange Economy
... A second and considerably more important way in which the use of money reduces uncertainty and contributes to the expansion of trade and the market system is through service as the medium of exchange. The frequency with which the same unit serves both as medium of exchange and as unit of account sug ...
... A second and considerably more important way in which the use of money reduces uncertainty and contributes to the expansion of trade and the market system is through service as the medium of exchange. The frequency with which the same unit serves both as medium of exchange and as unit of account sug ...
NBER WORKING PAPER SERIES MONETARY RULES FOR COMMODITY TRADERS Luis Catão Roberto Chang
... If they do not, one would also like to know what features of the economy account for the difference. While one might have feared that the relative complexity of our model might make its solution intractable, we present and discuss a very intuitive closed form characterization of optimal (or Ramsey) ...
... If they do not, one would also like to know what features of the economy account for the difference. While one might have feared that the relative complexity of our model might make its solution intractable, we present and discuss a very intuitive closed form characterization of optimal (or Ramsey) ...
Liberal Mercantilism: Exchange Rate Regimes, Foreign Currency
... Foreign currency debt is itself a reason for countries to accumulate foreign reserves and to be sensitive to foreign reserve losses. Foreign currency debt also amplifies the sensitivity of countries with managed exchange rates to reserve losses. Countries with high levels of foreign currency debt mi ...
... Foreign currency debt is itself a reason for countries to accumulate foreign reserves and to be sensitive to foreign reserve losses. Foreign currency debt also amplifies the sensitivity of countries with managed exchange rates to reserve losses. Countries with high levels of foreign currency debt mi ...
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.