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Chapter 14 - University of Alberta
Chapter 14 - University of Alberta

... interest rate at the top of the band (the Bank rate). • The bank pays interest on deposits at the rate given by the bottom edge of the band. ...
THE IMPACT OF EXCHANGE RATE PASS-THROUGH
THE IMPACT OF EXCHANGE RATE PASS-THROUGH

... products that are exported. The deficit of trade balance just shows that Serbian export (and thus the economy) is uncompetitive. Many factors affect the real exchange rate (Miljković, 2008). One of them is the change in the value of aggregate output (gross domestic product). When there is a tendency ...
External debt and macrodynamics in emerging economies
External debt and macrodynamics in emerging economies

... As to the monetary side of the model, it is assumed that the monetary base is generated exclusively through the foreign channel, and therefore the money supply5 consists of the stock of liquidity generated through the external financing of the economy, net of the interest outflows. The money supply ...
The duration of fixed exchange rate regimes Sébastien Wälti Trinity College Dublin
The duration of fixed exchange rate regimes Sébastien Wälti Trinity College Dublin

... in some regime parameter. The sample of countries varies across studies, including either OECD countries, or Latin American countries, or a selection of developed, emerging market and other economies, or all countries. Most of the literature, e.g. Detragiache, Mody and Okada (2005), makes use of log ...
Foreign Exchange Outlook - Global Banking and Markets
Foreign Exchange Outlook - Global Banking and Markets

... a trade weighted basis. The rally has been fundamentally led, with relative growth and central bank policies being the core drivers while flows and technicals have been playing supporting roles. However, massive shifts in financial markets generally — including low oil prices, suppressed sovereign b ...
The IMF Classification of Official Exchange Rate Regimes
The IMF Classification of Official Exchange Rate Regimes

On the Political Economy of Exchange Rate Policy
On the Political Economy of Exchange Rate Policy

... As the set of institutional arrangements, mechanisms, and tools that are used to influence or control  the value of the national currency on the foreign exchange markets, an ‘exchange rate regime’  forms one of the principal means by which a national state is integrated into the global economy.  The ...
Regional economic integration and economic locations: a note
Regional economic integration and economic locations: a note

S. Grain and Soybean Exports to Japan
S. Grain and Soybean Exports to Japan

... is from Clark (6). 2 Price changes resulting from changes in exchange rates are used to measure the effects on quantities. Japanese import demand elasticities are estimated using regression analysis. The domestic price and income effects of exchange rate changes, in both the United States and Japan, ...
Document
Document

Chapter 8
Chapter 8

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Calculating the Unthinkable: Exchange Rate Effects of a Credit Event
Calculating the Unthinkable: Exchange Rate Effects of a Credit Event

... To calculate the EUR-USD exchange rate effects of a credit event of a member of the euro zone, we create a portfolio of credit default swaps (CDS) referencing to the same sovereign entities. For European sovereigns, it is possible to trade CDS that are denominated either in Euro or US-Dollars. These ...
Evidence from unit root tests with structural breaks
Evidence from unit root tests with structural breaks

... downward adjustments. Nevertheless, in our point of view, the misalignment situation of the local currency was the most important one. This latter had become overvalued in the early 1980s, and this had not been corrected by early 1985. Moreover, at that time, commodity prices began to weaken, leadin ...
Exchange Rates
Exchange Rates

... • The exchange rates were fixed because the central banks in those countries offered to buy or sell the currencies at the fixed exchange rate • Examples include the gold standard, which operated in the late 1800s and early 1900s, and the Bretton Woods system, which was in place from 1944 until the e ...
Political Contagion in Currency Crises
Political Contagion in Currency Crises

... deficit and is financing it by printing money. The rate of monetary expansion is inconsistent with the fixed exchange rate in the long run; in the short run, individuals do not want to hold the higher level of domestic currency and exchange it for foreign-currency-denominated assets. The peg rate mu ...
EMU strategies: Lessons from Greece in view of the EU Enlargement
EMU strategies: Lessons from Greece in view of the EU Enlargement

... to manage in the absence of the stabilizing influence of a concrete programme, and a timetable, towards monetary union. In this context, the 1992-93 ERM crisis worked as a catalyst, strengthening member states resolve to pursue progress towards monetary union on the basis of the EMU project of the M ...
This PDF is a selection from a published volume from... of Economic Research Volume Title: NBER International Seminar on Macroeconomics 2012
This PDF is a selection from a published volume from... of Economic Research Volume Title: NBER International Seminar on Macroeconomics 2012

... This paper investigates how capital account policies can be used to devalue the real exchange rate. This is a critical topic given current policy discussions about the extent to which some economies are taking policy measures to maintain a persistent devaluation of the real exchange rate. In particu ...
Does Misaligned Currency Affect Economic Growth? – Evidence
Does Misaligned Currency Affect Economic Growth? – Evidence

Examining exchange rate return factors before and after
Examining exchange rate return factors before and after

... foreign exchange relationships. Also concluded by Chen, Roll & Ross, 1986 - "Asset prices should depend on their exposures to the state variable that describe the company". Thereto, research papers published regarding the clarification of the common factors within linear relationships between countr ...
Determinants of the ZAR/USD exchange rate and policy
Determinants of the ZAR/USD exchange rate and policy

... the long run, a 1% increase in GDP per capita will lead to a 3.7% appreciation of the rand. If the real gold price rises 1%, the rand will appreciate about 1%. When gross reserves of the SARB increases 1%, the rand will appreciate 0.7%. There is a negative trend. In the short run, except for the dum ...
The Foreign Exchange Market
The Foreign Exchange Market

... A country that is borrowing more from the rest of the world than it is lending to it is called a net borrower. A country that is lending more to the rest of the world than it is borrowing from it is called a net lender. Since the early 1980s, except for 1991, the United States has been a net borrowe ...
External Balance Correction: Depreciation or Protection? (Brookings
External Balance Correction: Depreciation or Protection? (Brookings

... to shiftfrom a deficitof 3.9 percentof GNP in 1986to balanceor even a surplus. Is there a need for policy intervention to bring about the adjustment?If so, which method will maximize welfare: exchange depreciation,tariffs, quotas, voluntaryexport restraints,or a mix? The first section of this paper ...
Foreign currencies - Brochure
Foreign currencies - Brochure

... date. The UBS “3+” hedging concept, for example, is now also established at other providers. Our bank is also a pioneer in the area of electronic trading applications. And using the innovative UBS FX Investor, your client advisor can develop exclusive structured forex products for you in a matter of ...
to see details - Economic Affairs Division
to see details - Economic Affairs Division

NBER WORKING PAPER SERIES THE SMALL OPEN ECONOMY CASE
NBER WORKING PAPER SERIES THE SMALL OPEN ECONOMY CASE

... approach. However, Buffie and Atolia (2007) claim otherwise by introducing durable goods into the model, a conjecture that was first spelled out in Calvo (1988). ...
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Fixed exchange-rate system

A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime where a currency's value is fixed against either the value of another single currency, to a basket of other currencies, or to another measure of value, such as gold. There are benefits and risks to using a fixed exchange rate. A fixed exchange rate is usually used in order to stabilize the value of a currency by directly fixing its value in a predetermined ratio to a different, more stable or more internationally prevalent currency (or currencies), to which the value is pegged. In doing so, the exchange rate between the currency and its peg does not change based on market conditions, the way floating currencies will do. This makes trade and investments between the two currency areas easier and more predictable, and is especially useful for small economies in which external trade forms a large part of their GDP.A fixed exchange-rate system can also be used as a means to control the behavior of a currency, such as by limiting rates of inflation. However, in doing so, the pegged currency is then controlled by its reference value. As such, when the reference value rises or falls, it then follows that the value(s) of any currencies pegged to it will also rise and fall in relation to other currencies and commodities with which the pegged currency can be traded. In other words, a pegged currency is dependent on its reference value to dictate how its current worth is defined at any given time. In addition, according to the Mundell–Fleming model, with perfect capital mobility, a fixed exchange rate prevents a government from using domestic monetary policy in order to achieve macroeconomic stability.In a fixed exchange-rate system, a country’s central bank typically uses an open market mechanism and is committed at all times to buy and/or sell its currency at a fixed price in order to maintain its pegged ratio and, hence, the stable value of its currency in relation to the reference to which it is pegged. The central bank provides the assets and/or the foreign currency or currencies which are needed in order to finance any payments imbalances.In the 21st century, the currencies associated with large economies typically do not fix or peg exchange rates to other currencies. The last large economy to use a fixed exchange rate system was the People's Republic of China which, in July 2005, adopted a slightly more flexible exchange rate system called a managed exchange rate. The European Exchange Rate Mechanism is also used on a temporary basis to establish a final conversion rate against the Euro (€) from the local currencies of countries joining the Eurozone.
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