International Liquidity and Exchange Rate Dynamics Xavier Gabaix Matteo Maggiori January 19, 2014
... exchange rate can often be the vehicle of transmission of financial shocks to the real economy. Our policy analysis suggests that novel trade-offs emerge when financial markets are disrupted or are less developed overall, and when output is far below its potential so that an exchange rate depreciati ...
... exchange rate can often be the vehicle of transmission of financial shocks to the real economy. Our policy analysis suggests that novel trade-offs emerge when financial markets are disrupted or are less developed overall, and when output is far below its potential so that an exchange rate depreciati ...
Foreign Exchange Intervention Since the Plaza Accord
... account balances. The evidence from the 1980s does not refute that skepticism. However, the experience of the past 15 years shows that intervention can have important sustained effects if it is large enough. A number of countries—most notably China—have used massive and sustained intervention to hol ...
... account balances. The evidence from the 1980s does not refute that skepticism. However, the experience of the past 15 years shows that intervention can have important sustained effects if it is large enough. A number of countries—most notably China—have used massive and sustained intervention to hol ...
This PDF is a selection from an out-of-print volume from the... of Economic Research Volume Title: International Economic Cooperation
... monetary policy in the United States would cause domestic expansion, tending to raise the domestic price level, and a current account deficit. The current account deficit would cause an inflow of dollars to other countries requiring foreign monetary expansion to maintain the exchange rate. This was ...
... monetary policy in the United States would cause domestic expansion, tending to raise the domestic price level, and a current account deficit. The current account deficit would cause an inflow of dollars to other countries requiring foreign monetary expansion to maintain the exchange rate. This was ...
Exchange Rate Regimes of Developing Countries: Global Context
... Recent crises involving emerging market economies, from the tequila crisis of 1995 through the Asian/Russian/Brazilian crises of 1997-98, carry important lessons for exchange regimes of developing and transition countries. Indeed, these experiences have led qualified observers, such as Eichengreen ( ...
... Recent crises involving emerging market economies, from the tequila crisis of 1995 through the Asian/Russian/Brazilian crises of 1997-98, carry important lessons for exchange regimes of developing and transition countries. Indeed, these experiences have led qualified observers, such as Eichengreen ( ...
Impacts of Exchange Rate Movements
... behavior. The real options theory emphasizes three important characteristics of investment. First, investment is at least partially irreversible, implying that some investment costs cannot be completely recovered by selling capital. Second, investment decisions have to be made in an uncertain world. ...
... behavior. The real options theory emphasizes three important characteristics of investment. First, investment is at least partially irreversible, implying that some investment costs cannot be completely recovered by selling capital. Second, investment decisions have to be made in an uncertain world. ...
Tilburg University Theories on the scope for foreign exchange
... 'The exact implications of an operation in foreign currency by the domestic central bank depend on who is the counterparry in the transaction. An earlier version of this paper which was circulated as a Research Memorandum of the Department of Economics, Tilburg University and which is available from ...
... 'The exact implications of an operation in foreign currency by the domestic central bank depend on who is the counterparry in the transaction. An earlier version of this paper which was circulated as a Research Memorandum of the Department of Economics, Tilburg University and which is available from ...
Advanced Accounting Project Group #3
... United States have gradually increase, the Canadian segment decreased from 2014 to 2015. In addition to that, the international segment barely grew 2% over the last year. Another finding was that the percentage of sales that comes from each item category didn’t change much over the last three years. ...
... United States have gradually increase, the Canadian segment decreased from 2014 to 2015. In addition to that, the international segment barely grew 2% over the last year. Another finding was that the percentage of sales that comes from each item category didn’t change much over the last three years. ...
Slide 1
... Council members from various kinds of pressure, precisely determines the conditions for the appointment and removal from office, and guards against the conflict of interest Financial: revenues and expenditures of the CNB are solely determined by the nature of the monetary and exchange rate policie ...
... Council members from various kinds of pressure, precisely determines the conditions for the appointment and removal from office, and guards against the conflict of interest Financial: revenues and expenditures of the CNB are solely determined by the nature of the monetary and exchange rate policie ...
fixed exchange rates
... Two possible results of increasing M under fixed exchange rate regime: 1. The decline of the international reserves, even devaluation. ...
... Two possible results of increasing M under fixed exchange rate regime: 1. The decline of the international reserves, even devaluation. ...
External Monetary Shocks to Central and Eastern European
... Croatia decided to stay close to the ECB development; both gave up totally or partially their monetary independence by adopting respectively a currency board and a crawling peg regime. Since 2001, Hungary opts for a crawling peg regime but with huge band (+/ − 15%). Poland quickly joined Romania and ...
... Croatia decided to stay close to the ECB development; both gave up totally or partially their monetary independence by adopting respectively a currency board and a crawling peg regime. Since 2001, Hungary opts for a crawling peg regime but with huge band (+/ − 15%). Poland quickly joined Romania and ...
inflation and exchange rate depreciation: a
... ability of capital markets to support the large volume of government borrowing and the fixed nature (in real terms) of government expenditure. 2.2.4 Mundell-Fleming Model ...
... ability of capital markets to support the large volume of government borrowing and the fixed nature (in real terms) of government expenditure. 2.2.4 Mundell-Fleming Model ...
NBER WORKING PAPER SERIES SMALL COUNTRIES IN MONETARY UNIONS: A TWO-TIER MODEL
... Earlier versions were presented to the RIP Seminar, Boston College and the International Economics Workshop, Harvard University. Comments from participants, especially Richard Cooper, are gratefully acknowledged. The research reported here is part of the NBER's research program in International Stud ...
... Earlier versions were presented to the RIP Seminar, Boston College and the International Economics Workshop, Harvard University. Comments from participants, especially Richard Cooper, are gratefully acknowledged. The research reported here is part of the NBER's research program in International Stud ...
Madagascar: A Competitiveness and Exchange Rate Assessment
... Over the last decade Madagascar’s export performance has improved. Export volumes grew on average by 9 percent a year between 1998 and 2007, up from 5 percent during the previous decade, and Madagascar has markedly reduced its dependence on traditional exports. At the same time, Madagascar has also ...
... Over the last decade Madagascar’s export performance has improved. Export volumes grew on average by 9 percent a year between 1998 and 2007, up from 5 percent during the previous decade, and Madagascar has markedly reduced its dependence on traditional exports. At the same time, Madagascar has also ...
International Economics, 10e (Krugman/Obstfeld/Melitz) Chapter 22
... 16) Describe some of the features hindering developing countries from growing faster. Answer: One of the features that can be hold developing countries from growing faster is corruption. The way governments control the economy by developing restrictions that would not allow international trade amon ...
... 16) Describe some of the features hindering developing countries from growing faster. Answer: One of the features that can be hold developing countries from growing faster is corruption. The way governments control the economy by developing restrictions that would not allow international trade amon ...
Money and Monetary Policy for the 21st Century
... price changes; that is, they reflect changes in the underlying demand for, or supply of, everything. Naturally, if all price changes are relative price changes, for every observed or expected rise or decline in some prices there must be corresponding price declines and rises in other prices.² For thi ...
... price changes; that is, they reflect changes in the underlying demand for, or supply of, everything. Naturally, if all price changes are relative price changes, for every observed or expected rise or decline in some prices there must be corresponding price declines and rises in other prices.² For thi ...
NBER WORKING PAPER SERIES EXCHANGE RATES, INFLATION, AND THE STERILIZATION Maurice Obstfeld
... in the conflict between internal and external balance. Its initial response was to intervene heavily in the foreign exchange market in support of the Deutschemark while at the same time increasing domestic credit to offset ...
... in the conflict between internal and external balance. Its initial response was to intervene heavily in the foreign exchange market in support of the Deutschemark while at the same time increasing domestic credit to offset ...
Gold standard, deflation and depression: The
... and Germany were the two epicentres, but no country integrated into the global economy was spared. In Switzerland, industrial production fell by 20 % between 1929 and 1932 and, other than in 1937 and 1939, remained below the 1929 level until the end of the decade (and, indeed, the end of World War I ...
... and Germany were the two epicentres, but no country integrated into the global economy was spared. In Switzerland, industrial production fell by 20 % between 1929 and 1932 and, other than in 1937 and 1939, remained below the 1929 level until the end of the decade (and, indeed, the end of World War I ...
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.