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Choosing an Anchor Currency for the Pacific
Choosing an Anchor Currency for the Pacific

... 11, 2009. More recent exchange rate data on a daily basis are not available for the Pacific. As shown in table 2 the US dollar is the dominant money in Pacific currency baskets. The coefficients for ß5 range from 0.7 in Fiji to 1.0 in Solomon Islands and Vanuatu indicating a high dollar weight in th ...
Session # Presentation Title
Session # Presentation Title

... Sybase, Inc., “Multi-Currency Module 1.0: Euro Converter”, http://www.sybase.com/products/global/euro Microsoft, Inc., “Microsoft Euro Currency Resource Center”, http://www.microsoft.com/euro/ Oracle Corp., “Oracle’s Euro Solution”, http://www.oracle.com/html/euro.html ...
The Curious Case of the Yen as a Safe Haven Currency
The Curious Case of the Yen as a Safe Haven Currency

... C. The effect of risk-off episodes on yield differentials ..............................................14  D. The effect of risk-off episodes on non-commercial derivative positions................14  V. Conclusions .................................................................................... ...
mmi14-Stratmann  19106659 en
mmi14-Stratmann 19106659 en

... We start by providing descriptive evidence on the behavior of the yields on government bonds over time, distinguishing across exchange rate regimes. First we analyze the differences in yields of countries with de facto and de jure floating exchange rate regimes versus all other countries (Figure 1). ...
Chapter 17
Chapter 17

... currently serves as a medium of exchange among other things, rises and the demand for other goods falls. Sraffa’s “natural” rate of interest on the medium of exchange good, call it gold, rises while the “natural” rate of interest on all other commodities falls. Two things happen in the market for go ...
MPSAS 4 The Effects of Changes In Foreign Exchange Rates
MPSAS 4 The Effects of Changes In Foreign Exchange Rates

... that conduct activities on behalf of a national government. The defense bases might conduct their activities substantially in the functional currency of the reporting entity. For example, military personnel may be paid in the functional currency and receive only a small allowance in local currency. ...
Official PDF , 25 pages
Official PDF , 25 pages

... It is important to note that in the present model the price of the home good changes only as a result of changes in the domestic prices of the tradables, but such changes displace the system from its equilibrium, which can only be restored by a change in P,. Therefore there is only one way to elimin ...
Proposals for a European Clearing Union
Proposals for a European Clearing Union

... is exhibited within any closed system. This principle is the necessary equality of credits and debits. If no credits can be removed outside the clearing system, but only transferred within it, the Union can never be in any difficulty as regards the honouring of cheques drawn upon it. It can make wha ...
The effect of financial deregulation on money demand in Malaysia
The effect of financial deregulation on money demand in Malaysia

... taken by the authority. For instance, interest rates on deposits of various maturities in the commercial banks and finance companies and discount rates on the Treasury bills were set to be market-determined during the 1971 to 1973 period. The freeing of interest rates continued in 1978 when Bank Neg ...
Rolling Back the Strong Yen under a Dollar Reserve Currency Regime
Rolling Back the Strong Yen under a Dollar Reserve Currency Regime

... that the dollar reserve currency regime will continue since the US has the most liquid bond market. This report is also based on the view that there will be no immediate change in the dollar reserve currency regime. Three reasons can be cited to support our view. First, no currency can be found that ...
Capital Inflows, Exchange Rate Flexibility, and Credit Booms
Capital Inflows, Exchange Rate Flexibility, and Credit Booms

Exchange Rate Pass-Through to Import Prices in the
Exchange Rate Pass-Through to Import Prices in the

... evolved considerably over time. After a long period of debate over the law of one price and convergence across countries, beginning in the late 1980s exchange rate pass-through studies emphasized industrial organization and the role of segmentation and price discrimination across geographically dist ...
Chapter 10 - Porterville College Home
Chapter 10 - Porterville College Home

Document
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... central bank  to changes in reserve flows normally takes a value of -1. Reason: any expansion of the domestic assets of the central bank will give rise to an offsetting capital outflow. This leaves the stock of money unchanged and implies a loss of monetary autonomy. ...
Monetary policy and its implementation
Monetary policy and its implementation

... close to 2½% as possible. Broadly speaking, central banks have only a single instrument, i.e. their policy interest rate, and can therefore only attain one macroeconomic goal in the long run. Internationally, a wide consensus has been achieved between governments and economists that price stability ...
Is WAMZ an Optimum Currency Area (OCA)?
Is WAMZ an Optimum Currency Area (OCA)?

... area literature asserts that meeting OCA criteria are necessary and sufficient conditions under which two or more countries can share the same currency without an adverse effect. This assertion is grounded with the assumption that nominal exchange rates are very effective; otherwise it is meaningles ...
Economics of Monetary Union 10e
Economics of Monetary Union 10e

... • Elimination of foreign exchange markets within union eliminates cost of exchanging one currency into another • Cost reductions amount to 0.25 to 0.5% of GDP (according to European Commission) • Full cost reduction only achieved when payments systems are fully integrated – TARGET payment system – S ...
How to leave a single currency
How to leave a single currency

... into a sovereign debt crisis in the Eurozone during the Spring of 2010. The closest we have gotten of finding an answer was during the Summer of 2015, when Greece was threatened with expulsion from the Eurozone.3 During those Summer weeks it became clear that pushing Greece out of the Eurozone, or G ...
NBER WORKING PAPER SERIES POLICY RESPONSES TO EXCHANGE-RATE MOVEMENTS Laurence M. Ball
NBER WORKING PAPER SERIES POLICY RESPONSES TO EXCHANGE-RATE MOVEMENTS Laurence M. Ball

... This issue is particularly important in open ...
BUOYANT ECONOMIES FINANCIAL SYSTEMS INQUIRY
BUOYANT ECONOMIES FINANCIAL SYSTEMS INQUIRY

... and hence prevents national income from rising. Therefore, national income remains the vertical line shown in the diagram. The effect of the rise in the exchange rate on the pre-existing exporters can also be assessed from the diagram. The income of the initial exporters declines, as shown by the ar ...
A Century of Purchasing Power Parity - uc
A Century of Purchasing Power Parity - uc

... What new findings can this paper claim to offer given the wealth of research on PPP in the past? It first should be noted that empirical support for PPP has waxed and waned over the years. From an historical standpoint, there have been numerous studies of PPP for various countries over the period in ...
How does monetary policy affect real sector of Papua New Guinea?
How does monetary policy affect real sector of Papua New Guinea?

... potential with per capita income in 2004, hardly above its 1975 level. There were three years of negative growth following the assumption of a new government in 2002. PNG’s economy began to pick up in 2005, as growth was aided this time by more sensible fiscal and monetary policies as well as by exp ...
Asian Currency and Financial Crises: Lessons from Vulnerability
Asian Currency and Financial Crises: Lessons from Vulnerability

... provide a very helpful overall descriptive account of what happened. Conceptually they focus on a contrast between two rather different categories of explanation: ‘underlying structural weaknesses and macroeconomic policies such that crisis was inevitable’ versus ‘a sudden run on the currency which ...
IOSR Journal of Economics and Finance (IOSR-JEF)
IOSR Journal of Economics and Finance (IOSR-JEF)

... Exchange rate regime and changes in the interest rate remain important issues of discourse in international finance as well as in developing nations, with more economies embracing trade liberalization as a requisite for economic growth (Obansa, Okoroafor, Aluko and Eze, 2013). Nigeria, like many oth ...
vsi10 roc Chinn neu  13314208 en
vsi10 roc Chinn neu 13314208 en

... Once one makes a judgment about what would be an appropriate trade surplus, for instance, then the mechanics of making a judgment about exchange rate misalignment is fairly straightforward – what amount of exchange rate appreciation achieves a given reduction in the trade surplus. In this vein, Gold ...
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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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