Not So Disconnected: Exchange Rates and the Capital Stock∗
... Our model builds on the canonical model of exchange rate determination: households consume a bundle of a freely traded good and a country-specific nontraded good. The nontraded good is produced using capital and labor as inputs, subject to a country-specific productivity shock. This productivity sho ...
... Our model builds on the canonical model of exchange rate determination: households consume a bundle of a freely traded good and a country-specific nontraded good. The nontraded good is produced using capital and labor as inputs, subject to a country-specific productivity shock. This productivity sho ...
MEASURING EXCHANGE MARKET PRESSURE IN MONGOLIA
... needed to examine and implement is to determine exchange market pressure with numerical values and to review opportunity to use it in exchange rate policy. In international experience, pressure on domestic currency is expressed by “exchange market pressure (hereinafter “EMP”) index”. Griton&Roper (1 ...
... needed to examine and implement is to determine exchange market pressure with numerical values and to review opportunity to use it in exchange rate policy. In international experience, pressure on domestic currency is expressed by “exchange market pressure (hereinafter “EMP”) index”. Griton&Roper (1 ...
Empirical Exchange Rate Equations for the Commodity Currencies
... exchange rate equations. By controlling for this major source of real shocks, one might hope the standard exchange rate equations - adjusted for commodity price shocks - might perform better for "the commodity currencies" than they have been found to perform for the major currencies. However, our re ...
... exchange rate equations. By controlling for this major source of real shocks, one might hope the standard exchange rate equations - adjusted for commodity price shocks - might perform better for "the commodity currencies" than they have been found to perform for the major currencies. However, our re ...
Thesis: “A TIME SERIES ANALYSIS OF THE ZAR/USD EXCHANGE
... The economy of South Africa is the largest in Africa, accounts for 24% of its gross domestic product in terms of purchasing power parity and is ranked as an upper-middle income economy by the World Bank. This makes the country one of only four countries in Africa in this category (the others being B ...
... The economy of South Africa is the largest in Africa, accounts for 24% of its gross domestic product in terms of purchasing power parity and is ranked as an upper-middle income economy by the World Bank. This makes the country one of only four countries in Africa in this category (the others being B ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
... of risk aversion of the firms that are exporting them. When firms are sufficiently risk averse (loving), relatively more differentiated products will be exported to countries that have low (high) exchange rate volatilities with the exporting country. ...
... of risk aversion of the firms that are exporting them. When firms are sufficiently risk averse (loving), relatively more differentiated products will be exported to countries that have low (high) exchange rate volatilities with the exporting country. ...
- International Growth Centre
... date in the future. Forward contracts are bilateral or “over the counter” (OTC) contracts, i.e., they are negotiated directly between buyer and seller. On the positive side, this means they are customizable in terms of the maturity date, the specific quality (grade) to be delivered, etc. On the othe ...
... date in the future. Forward contracts are bilateral or “over the counter” (OTC) contracts, i.e., they are negotiated directly between buyer and seller. On the positive side, this means they are customizable in terms of the maturity date, the specific quality (grade) to be delivered, etc. On the othe ...
Research and Monetary Policy Department Working Paper No:07/07
... domestic bank deposits), without altering relative weights of land and FX deposits in non-monetary assets. Hence, other things being equal, both the demand for land and FX deposits decline, which results in a decrease in land prices. An increase in the rate of return on FX deposits shifts household ...
... domestic bank deposits), without altering relative weights of land and FX deposits in non-monetary assets. Hence, other things being equal, both the demand for land and FX deposits decline, which results in a decrease in land prices. An increase in the rate of return on FX deposits shifts household ...
THE INTERNATIONALISATION OF THE YEN: ESSENTIAL ISSUES
... The first steps: the early 1980s Japan’s monetary authority, the Ministry of Finance, had only began to discuss internationalising the yen at the end of the 1970s. Initially it viewed the likely impact on the economy as negative. The annual report of the International Finance Bureau of the Ministry ...
... The first steps: the early 1980s Japan’s monetary authority, the Ministry of Finance, had only began to discuss internationalising the yen at the end of the 1970s. Initially it viewed the likely impact on the economy as negative. The annual report of the International Finance Bureau of the Ministry ...
NBER WORKING PAPER SERIES INTERNATIONAL TRADE AND MACROECONOMIC DYNAMICS WITH HETEROGENEOUS FIRMS
... Formal models of international macroeconomic dynamics do not usually address or incorporate the determinants and evolution of trade patterns. The vast majority of such macroeconomic models take the pattern of international trade and the structure of markets for goods and factors of production as giv ...
... Formal models of international macroeconomic dynamics do not usually address or incorporate the determinants and evolution of trade patterns. The vast majority of such macroeconomic models take the pattern of international trade and the structure of markets for goods and factors of production as giv ...
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... not the balance of international financial payments of a country as .a whole is affected, depreciation involves increased costs for those in a country who owe debts in terms of foreign money and increased receipts for those owning investments in terms of foreign money; this, as well as the directly ...
... not the balance of international financial payments of a country as .a whole is affected, depreciation involves increased costs for those in a country who owe debts in terms of foreign money and increased receipts for those owning investments in terms of foreign money; this, as well as the directly ...
Tradability of Goods and Real Exchange Rate
... have used to construct P Ttus , P Ttmex , and RER is explained by the relative internal price of nontradable to tradable goods across countries tracks the actual real exchange rate very closely. Figure 3 presents data on first differences of [ t . Once again RERt is more volatile than RER [ t , with ...
... have used to construct P Ttus , P Ttmex , and RER is explained by the relative internal price of nontradable to tradable goods across countries tracks the actual real exchange rate very closely. Figure 3 presents data on first differences of [ t . Once again RERt is more volatile than RER [ t , with ...
Macroprudential policies, the long
... Prudential regulations (not monetary policy) may need to address what is essentially a macroeconomic problem – and not just a sector-specific problem.3 Two examples of such global variables that are of particular relevance to central banks are the interest rate yield curve and the exchange rate. Cen ...
... Prudential regulations (not monetary policy) may need to address what is essentially a macroeconomic problem – and not just a sector-specific problem.3 Two examples of such global variables that are of particular relevance to central banks are the interest rate yield curve and the exchange rate. Cen ...
NBER WORKING PAPER SERIES CURRENCY MISALIGNMENTS AND OPTIMAL MONETARY POLICY: A REEXAMINATION
... A sophisticated extension of this work is the recent paper by Corsetti, Dedola, and Leduc (2007). That paper extends earlier work in several dimensions, including staggered price setting. But it does not directly address the issue of whether currency misalignments belong in the targeting rule along ...
... A sophisticated extension of this work is the recent paper by Corsetti, Dedola, and Leduc (2007). That paper extends earlier work in several dimensions, including staggered price setting. But it does not directly address the issue of whether currency misalignments belong in the targeting rule along ...
Monetary Policy Autonomy in European Non-Euro Countries
... With business cycles being asynchronous, the need to stabilize the exchange rate ties the government’s hand. Fixed exchange rate commitments reduce monetary policy autonomy because, under a fixed exchange rate system, domestic inflation must be close to the inflation rate of the anchor currency. If ...
... With business cycles being asynchronous, the need to stabilize the exchange rate ties the government’s hand. Fixed exchange rate commitments reduce monetary policy autonomy because, under a fixed exchange rate system, domestic inflation must be close to the inflation rate of the anchor currency. If ...
Tight Money in a Post-Crisis Defense of the Exchange Rate: What
... “overshooting” model, for example, the expected future spot rate appreciates more than the spot rate that prevails before a monetary shock, making Se+1 a decreasing function of R. It is easy to see that if this is so, condition (1) would immediately imply that increases in R must be associated with ...
... “overshooting” model, for example, the expected future spot rate appreciates more than the spot rate that prevails before a monetary shock, making Se+1 a decreasing function of R. It is easy to see that if this is so, condition (1) would immediately imply that increases in R must be associated with ...
Official PDF , 23 pages
... “overshooting” model, for example, the expected future spot rate appreciates more than the spot rate that prevails before a monetary shock, making Se+1 a decreasing function of R. It is easy to see that if this is so, condition (1) would immediately imply that increases in R must be associated with ...
... “overshooting” model, for example, the expected future spot rate appreciates more than the spot rate that prevails before a monetary shock, making Se+1 a decreasing function of R. It is easy to see that if this is so, condition (1) would immediately imply that increases in R must be associated with ...
"Exchange Rate Disconnect in General Equilibrium"
... Importantly, this does not rely on price or wage stickiness, which we assume away in the baseline model. Indeed, the nominal stickiness is not needed, as the driving process does not rely on the monetary shocks. The model, instead, relies on strategic complementarities in price setting, which gener ...
... Importantly, this does not rely on price or wage stickiness, which we assume away in the baseline model. Indeed, the nominal stickiness is not needed, as the driving process does not rely on the monetary shocks. The model, instead, relies on strategic complementarities in price setting, which gener ...
Exchange Rates and Fundamentals: Closing a Two
... primarily driven by permanent shocks to the money supply differential, among other stationary shocks. This stringent theoretical prediction echoes the findings of NR. However, in contrast to the claim of NR, the permanent but cointegrated TFP shocks cannot be significant drivers of the random-walk nomi ...
... primarily driven by permanent shocks to the money supply differential, among other stationary shocks. This stringent theoretical prediction echoes the findings of NR. However, in contrast to the claim of NR, the permanent but cointegrated TFP shocks cannot be significant drivers of the random-walk nomi ...
NBER WORKING PAPER SERIES REAL EXCHANGE RATE VOLATILITY IN SUDDEN-STOP-PRONE ECONOMIES
... prices and international tradables relative prices is sharply negative. The standard deviation of Mexico’s domestic relative prices is also markedly higher during these periods. As a result, measures of the contribution of tradables goods prices to real-exchange-rate variability corrected to take in ...
... prices and international tradables relative prices is sharply negative. The standard deviation of Mexico’s domestic relative prices is also markedly higher during these periods. As a result, measures of the contribution of tradables goods prices to real-exchange-rate variability corrected to take in ...
Exporters and Exchange Rates ∗ Doireann Fitzgerald Stefanie Haller
... relative demand across markets, so the cutoff for participation depends on the level of the exchange rate, as well as a particular plant’s costs and customer capital. The key prediction of the model for us is that the sensitivity of entry to the exchange rate depends on the potential entrant’s dist ...
... relative demand across markets, so the cutoff for participation depends on the level of the exchange rate, as well as a particular plant’s costs and customer capital. The key prediction of the model for us is that the sensitivity of entry to the exchange rate depends on the potential entrant’s dist ...
International Economics, 10e (Krugman/Obstfeld/Melitz) Chapter 17
... 21) What have we assumed when we conclude that a real depreciation of the currency improves the current account? A) The volume effect outweighs the value effect. B) The value effect outweighs the volume effect. C) All else equal and the volume effect outweighs the value effect. D) All else equal an ...
... 21) What have we assumed when we conclude that a real depreciation of the currency improves the current account? A) The volume effect outweighs the value effect. B) The value effect outweighs the volume effect. C) All else equal and the volume effect outweighs the value effect. D) All else equal an ...
an evaluation of the contractionary devaluation
... firms with high liability dollarization those results are reversed. Domac (1997) reaches the same conclusion looking at the Turkish economy over 1960-1990. Recently, many empirical studies resort to micro-level data to assess the impact of real exchange rate depreciations in the presence of currenc ...
... firms with high liability dollarization those results are reversed. Domac (1997) reaches the same conclusion looking at the Turkish economy over 1960-1990. Recently, many empirical studies resort to micro-level data to assess the impact of real exchange rate depreciations in the presence of currenc ...
DP2005/06 A Simple, Structural, and Empirical Model of the Antipodean Transmission Mechanism
... long-run) restrictions to achieve identification. For instance, a recursive ordering of shocks makes use of the assumption that domestic shocks in small open economies have no effects on world shocks. Similarly, contemporaneous restrictions posit short-run delays in the transmission of macroeconomic ...
... long-run) restrictions to achieve identification. For instance, a recursive ordering of shocks makes use of the assumption that domestic shocks in small open economies have no effects on world shocks. Similarly, contemporaneous restrictions posit short-run delays in the transmission of macroeconomic ...
Does inflation or currency depreciation drive monetary policy in
... balance of payments surplus in order to shelter domestic employment from import competition. The Bank of Russia seems to have preferred slowing the real exchange rate appreciation rather than the rate of inflation, as a result inflation proxied by the consumer price index changes has stayed quite hi ...
... balance of payments surplus in order to shelter domestic employment from import competition. The Bank of Russia seems to have preferred slowing the real exchange rate appreciation rather than the rate of inflation, as a result inflation proxied by the consumer price index changes has stayed quite hi ...
Contemporary Logistics the Forming of Real-life Exchange Rate Misalignment
... early years when policies of Reform and opening to the outside world were implemented, the market mechanism began to play a role in the forming process of RMB exchange rate system and its effect became more and more important. 3.1.1 RMB exchange rate going out of balance under the control of dual ex ...
... early years when policies of Reform and opening to the outside world were implemented, the market mechanism began to play a role in the forming process of RMB exchange rate system and its effect became more and more important. 3.1.1 RMB exchange rate going out of balance under the control of dual ex ...