The International Monetary Fund and Current Account
... payments for the exports would be used to pay for imports from the other partner country, thus creating a fragmented international trade and payments system. Other mechanisms frequently used involved the direct rationing of foreign exchange by making it only available for payments of goods or commod ...
... payments for the exports would be used to pay for imports from the other partner country, thus creating a fragmented international trade and payments system. Other mechanisms frequently used involved the direct rationing of foreign exchange by making it only available for payments of goods or commod ...
Foreign Exchange Risk Management Practices
... they had been during the previous system with an inflexible exchange rate. The SEK depreciated against foreign currencies after the introduction of the floating exchange rate. This favoured the exporting companies when their goods and services, in relative terms, became cheaper for their foreign par ...
... they had been during the previous system with an inflexible exchange rate. The SEK depreciated against foreign currencies after the introduction of the floating exchange rate. This favoured the exporting companies when their goods and services, in relative terms, became cheaper for their foreign par ...
IOSR Journal of Economics and Finance (IOSR-JEF)
... labeled “fully flexible exchange rate”, is associated with monetary independence, and financial integration – the preferred choice of the U.S. during the last three decades. The right vertex, labeled “giving up monetary independence”, is associated with exchange rate stability (a pegged exchange rat ...
... labeled “fully flexible exchange rate”, is associated with monetary independence, and financial integration – the preferred choice of the U.S. during the last three decades. The right vertex, labeled “giving up monetary independence”, is associated with exchange rate stability (a pegged exchange rat ...
Cours 6 - Solvay Brussels School
... A critique of the IMF approach (7) The effects of stabilisation programmes A main methodological problem of testing the effects of an IMF programme is to what compare the observed situation. Four approaches may be used : • “Before and after”. The problem is here that the economic environment has ...
... A critique of the IMF approach (7) The effects of stabilisation programmes A main methodological problem of testing the effects of an IMF programme is to what compare the observed situation. Four approaches may be used : • “Before and after”. The problem is here that the economic environment has ...
Document
... 5. Which of the following statements about mercantilism is correct? A) Imports of a nation are a prime source of national wealth. B) Mercantilism fell out of favor in the eighteenth century. C) Game theory would imply that if one country attempted mercantilism, all would and international trade woul ...
... 5. Which of the following statements about mercantilism is correct? A) Imports of a nation are a prime source of national wealth. B) Mercantilism fell out of favor in the eighteenth century. C) Game theory would imply that if one country attempted mercantilism, all would and international trade woul ...
Regime Switches in Exchange Rate Volatility and Uncovered
... failure and a low-volatility environment are mutually dependent. We also find that low-interest-rate currencies appreciate less frequently, but once it occurs, its movement is faster than when they depreciate. This may suggest that exchange rate movement is faster when carry trade is unwound on a la ...
... failure and a low-volatility environment are mutually dependent. We also find that low-interest-rate currencies appreciate less frequently, but once it occurs, its movement is faster than when they depreciate. This may suggest that exchange rate movement is faster when carry trade is unwound on a la ...
The effects of exchange rate fluctuations on economic activity in
... forecasts of the exchange rate. Recent experiences of currency crises have brought to the forefront the importance of anchoring agents’ forecasts in the design of an appropriate exchange rate policy. Hence, the theory aims to separate the effects of anticipated shifts in the exchange rate from unant ...
... forecasts of the exchange rate. Recent experiences of currency crises have brought to the forefront the importance of anchoring agents’ forecasts in the design of an appropriate exchange rate policy. Hence, the theory aims to separate the effects of anticipated shifts in the exchange rate from unant ...
11
Financial
Contagion:
The
Impact
of
Global
Disasters
Jory
Fong
... Definition 5: (Shift-) contagion occurs when the transmission channel intensifies or, more generally, changes after a shock in one market. The international transmission mechanism may strengthen in response to a crisis in one country. For instance, some channels of transmission might be active only ...
... Definition 5: (Shift-) contagion occurs when the transmission channel intensifies or, more generally, changes after a shock in one market. The international transmission mechanism may strengthen in response to a crisis in one country. For instance, some channels of transmission might be active only ...
International monetary policy transmission
... started to flow out of emerging market economies (EMEs). The event echoed what had happened after the first “tapering” announcement last May: the prospect of US monetary tightening sent EME financial markets tumbling. These developments confirm that advanced economy monetary policy has large and sig ...
... started to flow out of emerging market economies (EMEs). The event echoed what had happened after the first “tapering” announcement last May: the prospect of US monetary tightening sent EME financial markets tumbling. These developments confirm that advanced economy monetary policy has large and sig ...
What Determines Bilateral Trade Flows? - bu people
... exchange rate arrangements. For example, Nigeria has four exchange rates: (i) the official exchange rate which results from auctions of foreign exchange by the Nigerian Central Bank; (ii) the interbank rate at which commercial banks transact among themselves; (iii) the retail "bureau de change" rate; ...
... exchange rate arrangements. For example, Nigeria has four exchange rates: (i) the official exchange rate which results from auctions of foreign exchange by the Nigerian Central Bank; (ii) the interbank rate at which commercial banks transact among themselves; (iii) the retail "bureau de change" rate; ...
NBER WORKING PAPER SERIES PRICE
... on a domestic money supply,2 with the assumption that aggregate demand for money in a country is inelastic with respect to foreign monetary developments, such as changes in exchange and foreign interest rates. The emphasis on the supply side and the assumption about the demand often leads to the con ...
... on a domestic money supply,2 with the assumption that aggregate demand for money in a country is inelastic with respect to foreign monetary developments, such as changes in exchange and foreign interest rates. The emphasis on the supply side and the assumption about the demand often leads to the con ...
The Benefits of Commitment to a Currency Peg
... suggests that, indeed, the credibility of the gold standard was much in doubt during the height of silver agitation, from the Sherman Silver Purchase Act of 1890 until the presidential election of 1896, and that the strong gyrations in bank leverage were intimately tied to changes in the credibilit ...
... suggests that, indeed, the credibility of the gold standard was much in doubt during the height of silver agitation, from the Sherman Silver Purchase Act of 1890 until the presidential election of 1896, and that the strong gyrations in bank leverage were intimately tied to changes in the credibilit ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
... a balance-of-payments and financial crisis, and huge costs in terms of output and employment. Unlike those of other countries in the region, the crisis was not caused by fiscal imbalances but was triggered by a deteriorating international environment, a misaligned exchange rate, and a weak financial ...
... a balance-of-payments and financial crisis, and huge costs in terms of output and employment. Unlike those of other countries in the region, the crisis was not caused by fiscal imbalances but was triggered by a deteriorating international environment, a misaligned exchange rate, and a weak financial ...
Volume 68 No. 4, December 2005 Contents
... This article looks at New Zealand’s oil consumption at a disaggregated level and discusses the consequences of movements in international oil prices for inflation, taking into account New Zealand’s industry structure as well as the tax treatment of different fuel types. Relative to the size of its ec ...
... This article looks at New Zealand’s oil consumption at a disaggregated level and discusses the consequences of movements in international oil prices for inflation, taking into account New Zealand’s industry structure as well as the tax treatment of different fuel types. Relative to the size of its ec ...
International Economics, 10e (Krugman/Obstfeld/Melitz) Chapter 17
... 25) What is the real exchange rate? What is its relationship to the current account? Answer: Defined as: EP /P (the exchange rate multiplied by foreign prices, divided by domestic prices). While the nominal exchange rate measures how much of a foreign currency one can buy with a unit of domestic cu ...
... 25) What is the real exchange rate? What is its relationship to the current account? Answer: Defined as: EP /P (the exchange rate multiplied by foreign prices, divided by domestic prices). While the nominal exchange rate measures how much of a foreign currency one can buy with a unit of domestic cu ...
Emerging countries` foreign exchange reserves and accumulation
... ballooned since 2000 due not only to China's swelling surplus, but also to those of the other major emerging countries or regions (i.e. Asia, Russia and, to a lesser extent, Brazil2). For commodities exporters, this phenomenon was driven by very strong global prices and may also have been fuelled by ...
... ballooned since 2000 due not only to China's swelling surplus, but also to those of the other major emerging countries or regions (i.e. Asia, Russia and, to a lesser extent, Brazil2). For commodities exporters, this phenomenon was driven by very strong global prices and may also have been fuelled by ...
NBER WORKING PAPER SERIES A THEORY AND EVIDENCE FROM EAST ASIA
... the major net lenders after the currency crisis in 1997. Table 1 reports total trade balances of eight East Asian economies from 1990 to 2004. It also reports their trade balances against the United States and the other trade partners. It shows that except for Hong Kong and the Philippines, the East ...
... the major net lenders after the currency crisis in 1997. Table 1 reports total trade balances of eight East Asian economies from 1990 to 2004. It also reports their trade balances against the United States and the other trade partners. It shows that except for Hong Kong and the Philippines, the East ...
The Great Liquidity Boom and the Monetary Superpower Hypothesis
... currency in the event of a speculative attack. Policy-makers noted that speculative capital inflows during good times could easily reverse direction once panic took hold—particularly since domestic capital would likely join the exodus. A sharp currency devaluation could be devastating for the domest ...
... currency in the event of a speculative attack. Policy-makers noted that speculative capital inflows during good times could easily reverse direction once panic took hold—particularly since domestic capital would likely join the exodus. A sharp currency devaluation could be devastating for the domest ...
Financial globalization and exchange rates
... Financial globalization has been one of the most important trends in the world economy in recent decades. This process has involved the accumulation of large gross international investment positions, with foreign asset and liability positions sharply rising, whether scaled by GDP or by domestic fina ...
... Financial globalization has been one of the most important trends in the world economy in recent decades. This process has involved the accumulation of large gross international investment positions, with foreign asset and liability positions sharply rising, whether scaled by GDP or by domestic fina ...
Currency war
Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a country's currency falls so too does the price of exports. Imports to the country become more expensive. So domestic industry, and thus employment, receives a boost in demand from both domestic and foreign markets. However, the price increase for imports can harm citizens' purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries.Competitive devaluation has been rare through most of history as countries have generally preferred to maintain a high value for their currency. Countries have generally allowed market forces to work, or have participated in systems of managed exchanges rates. An exception occurred when currency war broke out in the 1930s. As countries abandoned the Gold Standard during the Great Depression, they used currency devaluations to stimulate their economies. Since this effectively pushes unemployment overseas, trading partners quickly retaliated with their own devaluations. The period is considered to have been an adverse situation for all concerned, as unpredictable changes in exchange rates reduced overall international trade.According to Guido Mantega, the Brazilian Minister for Finance, a global currency war broke out in 2010. This view was echoed by numerous other government officials and financial journalists from around the world. Other senior policy makers and journalists suggested the phrase ""currency war"" overstated the extent of hostility. With a few exceptions, such as Mantega, even commentators who agreed there had been a currency war in 2010 generally concluded that it had fizzled out by mid-2011.States engaging in possible competitive devaluation since 2010 have used a mix of policy tools, including direct government intervention, the imposition of capital controls, and, indirectly, quantitative easing. While many countries experienced undesirable upward pressure on their exchange rates and took part in the ongoing arguments, the most notable dimension of the 2010–11 episode was the rhetorical conflict between the United States and China over the valuation of the yuan. In January 2013, measures announced by Japan which were expected to devalue its currency sparked concern of a possible second 21st century currency war breaking out, this time with the principal source of tension being not China versus the US, but Japan versus the Eurozone. By late February, concerns of a new outbreak of currency war had been mostly allayed, after the G7 and G20 issued statements committing to avoid competitive devaluation. After the European Central Bank launched a fresh programme of quantitative easing in January 2015, there was once again an intensification of discussion about currency war.