Weak economy and strong currency: The origins of the strong yen in
... when the real economic growth approached the zero percent mark – the yen reached its alltime high of 79 yen per dollar. At that time, only unsterilized foreign exchange intervention could reverse the trend. Nevertheless – despite the recent decline – the high yen persists, and represents a major obs ...
... when the real economic growth approached the zero percent mark – the yen reached its alltime high of 79 yen per dollar. At that time, only unsterilized foreign exchange intervention could reverse the trend. Nevertheless – despite the recent decline – the high yen persists, and represents a major obs ...
The mechanics of money supply determination
... borrowing – it stands ready to lend reserves to banks at a set rate (say 4.25%) and borrow from banks at a (lower) rate (say 4%). [The former is like the Fed’s discount rate, the latter is like the BoE’s payment of interest on reserves.] The operating target rate is essentially the overnight lending ...
... borrowing – it stands ready to lend reserves to banks at a set rate (say 4.25%) and borrow from banks at a (lower) rate (say 4%). [The former is like the Fed’s discount rate, the latter is like the BoE’s payment of interest on reserves.] The operating target rate is essentially the overnight lending ...
RMB Internationalization: An Empirical and Policy Analysis
... In the long term, the international roles of a currency tend to be determined by some fundamental factors .Since the international currency has the functions--“store value”, “medium of exchange”, “unit of account”, and the use of international currency is determined by the market force, a competitiv ...
... In the long term, the international roles of a currency tend to be determined by some fundamental factors .Since the international currency has the functions--“store value”, “medium of exchange”, “unit of account”, and the use of international currency is determined by the market force, a competitiv ...
Lectures 18 to 20
... Because the trade balance also depends on changes in U.S. and rest of the world disposable income (and other factors), it may respond with a lag to changes in the real exchange rate, so the correlation is not perfect (as seen in the years 2002– ...
... Because the trade balance also depends on changes in U.S. and rest of the world disposable income (and other factors), it may respond with a lag to changes in the real exchange rate, so the correlation is not perfect (as seen in the years 2002– ...
macro.5
... rate raises the cost of borrowing from the Fed, so banks will take out fewer discount loans; a lower discount rate makes discount loans more attractive to banks, and loan volume will increase. ...
... rate raises the cost of borrowing from the Fed, so banks will take out fewer discount loans; a lower discount rate makes discount loans more attractive to banks, and loan volume will increase. ...
A Small Economic Model for Argentina (Summary)
... Here, for simpli…cation’s sake, it is assumed that international reserves are invested in risk-free, dollar-denominated foreign bonds. In log-linear terms, equation 17, becomes: S b bt = m m R b t + (1 ebU ...
... Here, for simpli…cation’s sake, it is assumed that international reserves are invested in risk-free, dollar-denominated foreign bonds. In log-linear terms, equation 17, becomes: S b bt = m m R b t + (1 ebU ...
The Effects of Exchange Controls on the Venezuelan
... rebuilding foreign reserves or for the political goals of reducing dependence on the private economy by stifling imports in order to implement more state control. The division runs along chavista/opposition lines, those who support the current government and those who do not. These divisions will be ...
... rebuilding foreign reserves or for the political goals of reducing dependence on the private economy by stifling imports in order to implement more state control. The division runs along chavista/opposition lines, those who support the current government and those who do not. These divisions will be ...
The Fiscal Theory of the Exchange Rate: A Quantitative Assessment
... Effects of a US fiscal deficit shock ...
... Effects of a US fiscal deficit shock ...
1a)Define redemption yield, spot rate and forward rate
... The U.S. yield curve is flat at 1% and the euro yield curve is flat at 2%. The current exchange rate is $0.95 per euro. What will be the swap rate on an agreement to exchange currency over a 3-year period? The swap will call for the exchange of 1 million euros for a given number of dollars in each y ...
... The U.S. yield curve is flat at 1% and the euro yield curve is flat at 2%. The current exchange rate is $0.95 per euro. What will be the swap rate on an agreement to exchange currency over a 3-year period? The swap will call for the exchange of 1 million euros for a given number of dollars in each y ...
Sources of Dutch Disease: Evidence from Transition Economies
... •Keep in mind that recipients in these cases are mostly private agents (household and firms) for very large inflows incentives to save/invest money and/or to increase the demand for imported goods. •Estimated turning point: 22.6 (for remittances) and 19.7 (for FDI). •Negative effect of the abolitio ...
... •Keep in mind that recipients in these cases are mostly private agents (household and firms) for very large inflows incentives to save/invest money and/or to increase the demand for imported goods. •Estimated turning point: 22.6 (for remittances) and 19.7 (for FDI). •Negative effect of the abolitio ...
NBER WORKING PAPER SERIES EXCHANGE CURRENT DYNAMICS UNDER RATIONAL EXPECTATIONS:
... The model is then estimated for Japan, using quarterly data since the advent of generalized floating in 1973. The estimation results accord well with the theory, with most of the structural and policy coefficients of the expected sign and significant. The estimates, which incorporate the constraints ...
... The model is then estimated for Japan, using quarterly data since the advent of generalized floating in 1973. The estimation results accord well with the theory, with most of the structural and policy coefficients of the expected sign and significant. The estimates, which incorporate the constraints ...
Do High Interest Rates Stem Capital Outflows?
... real return lies below the world real interest rate. The country experiences capital outflows, but these can be eliminated by the conventional policy of raising interest rates. Further increases in the interest rate above RL result in positive net capital flows. Beyond the critical point RM, however ...
... real return lies below the world real interest rate. The country experiences capital outflows, but these can be eliminated by the conventional policy of raising interest rates. Further increases in the interest rate above RL result in positive net capital flows. Beyond the critical point RM, however ...
Monetary Theory and Business Cycles
... costs and how long will be the expected project durations in A and B? What are the net present value of the two projects? If uncertainty level in country A returns to 55% per annum due to reasons unforeseen by policy makers and business decision makers, what is the net present value of the project? ...
... costs and how long will be the expected project durations in A and B? What are the net present value of the two projects? If uncertainty level in country A returns to 55% per annum due to reasons unforeseen by policy makers and business decision makers, what is the net present value of the project? ...
OCA criteria - Erasmus University Thesis Repository
... over the years, terms of trade will stay reasonably stable too (Fleming, 1971). Different inflation rates cause variations in terms of trade, because when the inflation rate changes, this influences the flow of goods, because of the changes in the price of imports and exports. This causes the curren ...
... over the years, terms of trade will stay reasonably stable too (Fleming, 1971). Different inflation rates cause variations in terms of trade, because when the inflation rate changes, this influences the flow of goods, because of the changes in the price of imports and exports. This causes the curren ...
An extended dynamic IS-LM model of exchange rate adjustments
... The foreign exchange market is crucial to international economic co-operations. It facilitates international trade and transactions. Nonetheless, disturbances generated in one part of this interlinked global economy can also be transmitted and magnified through the foreign exchange market as one of ...
... The foreign exchange market is crucial to international economic co-operations. It facilitates international trade and transactions. Nonetheless, disturbances generated in one part of this interlinked global economy can also be transmitted and magnified through the foreign exchange market as one of ...
Chapter 14 Money, Interest, and the Exchange Rate
... How Is Economy’s Money Supply Determined? • Controlled by central bank that – Directly regulates the amount of currency in existence – Indirectly controls the amount of checking deposits issued by private banks Copyright © 2003 Pearson Education, Inc. ...
... How Is Economy’s Money Supply Determined? • Controlled by central bank that – Directly regulates the amount of currency in existence – Indirectly controls the amount of checking deposits issued by private banks Copyright © 2003 Pearson Education, Inc. ...
Rebalancing the Global Economy Stefan Collignon
... depend on policy decisions, are recorded as changes in foreign exchange reserves of the central bank. If a country imports more than it exports, it needs foreign currency to pay for it. It can borrow and/or run down foreign reserves. Conversely, an export surplus implies lending money to consumers a ...
... depend on policy decisions, are recorded as changes in foreign exchange reserves of the central bank. If a country imports more than it exports, it needs foreign currency to pay for it. It can borrow and/or run down foreign reserves. Conversely, an export surplus implies lending money to consumers a ...
NBER WORKING PAPER SERIES EXCHANGE RATE FLEXIBILITY AND Jorge Braga de Macedo
... exchange rate, comparative static results can then show the effects of, for instance, a current or expected foreign cyclical upturn on the home ...
... exchange rate, comparative static results can then show the effects of, for instance, a current or expected foreign cyclical upturn on the home ...
Higher inflation and current account deficit call for restrictive
... by 7% instead of 6% and public consumption by 4½% instead of 3½%. On the other hand, a somewhat greater contraction in investment was assumed in the December forecast than in the October one, although less than in the first NEI forecasts for 1999. The wider current account deficit more than outweigh ...
... by 7% instead of 6% and public consumption by 4½% instead of 3½%. On the other hand, a somewhat greater contraction in investment was assumed in the December forecast than in the October one, although less than in the first NEI forecasts for 1999. The wider current account deficit more than outweigh ...
NBER WORKING PAPER SERIES AT THE CENTRAL BANK: LESSONS FROM SUDAN
... The structure of trade in same developing countries, especially in sub-Saharan Africa, suggests a different analysis and result, however. ...
... The structure of trade in same developing countries, especially in sub-Saharan Africa, suggests a different analysis and result, however. ...
Uruguay: Two Years of Monetary Policy in Adverse Conditions
... At the theoretical and empirical level, I find that the economy (characterized by the output gap and the rate of inflation) should behave in a fairly similar way when different shocks are introduced under the diverse rules considered. In general, the interest rate rule is better in terms of output s ...
... At the theoretical and empirical level, I find that the economy (characterized by the output gap and the rate of inflation) should behave in a fairly similar way when different shocks are introduced under the diverse rules considered. In general, the interest rate rule is better in terms of output s ...
