exchange rate
... Imports and Exports and the Trade Feedback Effect Export prices of other countries affect U.S. import prices. The general rate of inflation abroad is likely to affect U.S. import prices. If the inflation rate abroad is high, U.S. import prices are likely to rise. The Price Feedback Effect price feed ...
... Imports and Exports and the Trade Feedback Effect Export prices of other countries affect U.S. import prices. The general rate of inflation abroad is likely to affect U.S. import prices. If the inflation rate abroad is high, U.S. import prices are likely to rise. The Price Feedback Effect price feed ...
Currency Options
... but the loss of CAD$5,000 in the options trade is entirely compensated for by the gain of CAD$5,000 (CAD$130,000 - CAD$125,000) in the value of the portfolio. Again, there is no obligation to hold the options until expiration; they can be sold in the market at any time if the investor’s strategy cha ...
... but the loss of CAD$5,000 in the options trade is entirely compensated for by the gain of CAD$5,000 (CAD$130,000 - CAD$125,000) in the value of the portfolio. Again, there is no obligation to hold the options until expiration; they can be sold in the market at any time if the investor’s strategy cha ...
The Demand for Money in Tanzania
... second half of the 1990s is puzzling. None of the standard determinants of money demand deteriorated during this period: real GDP was rising (in contrast to the more typical contraction in a money-based stabilization), inflation was falling, nominal depreciation remained modest, and interest rates f ...
... second half of the 1990s is puzzling. None of the standard determinants of money demand deteriorated during this period: real GDP was rising (in contrast to the more typical contraction in a money-based stabilization), inflation was falling, nominal depreciation remained modest, and interest rates f ...
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... Þat monies trading at ßoating exchange rates, preferential trade arrangements, direct state trading, default on foreign debts, and exchange controls. In earlier years economists had regarded such nationalistic experiments, when they occurred in Latin America or other area of the periphery, with a mi ...
... Þat monies trading at ßoating exchange rates, preferential trade arrangements, direct state trading, default on foreign debts, and exchange controls. In earlier years economists had regarded such nationalistic experiments, when they occurred in Latin America or other area of the periphery, with a mi ...
Exchange rate overshooting and the costs of floating April 2004 1 Michele Cavallo
... analytical framework that explains the overshooting phenomenon and can be used to evaluate the costs of a currency crisis in a country with a high level of foreign currency debt. The key mechanism of the model is the presence of a margin constraint (as in Aiyagari and Gertler, 1999) imposed on the ...
... analytical framework that explains the overshooting phenomenon and can be used to evaluate the costs of a currency crisis in a country with a high level of foreign currency debt. The key mechanism of the model is the presence of a margin constraint (as in Aiyagari and Gertler, 1999) imposed on the ...
Ronald I. McKinnon AN INTERNATIONAL GOLD STANDARD WITHOUT GOLD
... of England was restricted one-for-one to any marginal changes in its gold reserves. Thus, internal inflation or deflation was ensured so as to maintain external equilibrium through changes in the net trade balance. Consider a more precise example of a disturbance in the flow of international payment ...
... of England was restricted one-for-one to any marginal changes in its gold reserves. Thus, internal inflation or deflation was ensured so as to maintain external equilibrium through changes in the net trade balance. Consider a more precise example of a disturbance in the flow of international payment ...
exchange rate regimes for developing and emerging markets
... last resort to domestic banks, strong, well-capitalized and wellregulated banks are indispensable. For countries with weak central banks and chaotic fiscal institutions, hard pegs are very necessary. But in opting for a hard peg, the government must adhere to its own set of rules governing monetar ...
... last resort to domestic banks, strong, well-capitalized and wellregulated banks are indispensable. For countries with weak central banks and chaotic fiscal institutions, hard pegs are very necessary. But in opting for a hard peg, the government must adhere to its own set of rules governing monetar ...
LCcarG715_en.pdf
... seen as the outcome of the interaction of flow supplies and demands. Alternatively, it may be determined like an asset in the sense that “its present value depends on expected future returns to holding assets valued in home or foreign money” (Eatwell and Taylor, 2000, p. 62). In the first case, the ...
... seen as the outcome of the interaction of flow supplies and demands. Alternatively, it may be determined like an asset in the sense that “its present value depends on expected future returns to holding assets valued in home or foreign money” (Eatwell and Taylor, 2000, p. 62). In the first case, the ...
Is Numérairology the Future of Monetary Economics?
... addition money wages or prices were sticky in terms of the bread numéraire, the bakers’ guild would have a non-trivial monetary stabilisation policy role. The welfare significance of the numéraire when there are nominal wage or price rigidities survives even in a cashless economy, interpreted here a ...
... addition money wages or prices were sticky in terms of the bread numéraire, the bakers’ guild would have a non-trivial monetary stabilisation policy role. The welfare significance of the numéraire when there are nominal wage or price rigidities survives even in a cashless economy, interpreted here a ...
Gold and currencies: hedging foreign-exchange risk
... Additionally, one consequence of central banks’ focus to providing liquidity to the market is the so-called global “capital superabundance” – an elevated ratio of financial assets to real assets. This is likely to create a more volatile environment over the next decade as investors chase yields and ...
... Additionally, one consequence of central banks’ focus to providing liquidity to the market is the so-called global “capital superabundance” – an elevated ratio of financial assets to real assets. This is likely to create a more volatile environment over the next decade as investors chase yields and ...
the eefect of exchange rate movements on kenya`s exports to
... Equilibrium exchange rate is determined by the interplay of the demand for foreign exchange and the supply of the foreign exchange. The exchange rate varies with varying supply and demand conditions, but it is always possible to find an equilibrium exchange rate which clears the market and creates e ...
... Equilibrium exchange rate is determined by the interplay of the demand for foreign exchange and the supply of the foreign exchange. The exchange rate varies with varying supply and demand conditions, but it is always possible to find an equilibrium exchange rate which clears the market and creates e ...
Primary Money Creation Channels under Instability
... that it takes care of development of a domestic economy. This is the way dominantly used by the Bundesbank prior to introduction of the Euro. Furthermore, this is also the practice used by the European Central Bank and some other central banks in the world. Approval of the discounted credit by a cen ...
... that it takes care of development of a domestic economy. This is the way dominantly used by the Bundesbank prior to introduction of the Euro. Furthermore, this is also the practice used by the European Central Bank and some other central banks in the world. Approval of the discounted credit by a cen ...
international financial crises
... We have to dig a little bit deeper and we have to remember it wasn’t just George Soros, it was the Vatican, and probably Muenchner Rueck also. Where would we look for the difference? The side issues of excess capacity in the world economy, low commodity prices – all of that is not going to give us ...
... We have to dig a little bit deeper and we have to remember it wasn’t just George Soros, it was the Vatican, and probably Muenchner Rueck also. Where would we look for the difference? The side issues of excess capacity in the world economy, low commodity prices – all of that is not going to give us ...
Digital currencies - Bank for International Settlements
... based on the use of a distributed ledger, 3 are an innovation that could have a range of impacts on various aspects of financial markets and the wider economy. These impacts could include potential disruption to business models and systems, as well as facilitating new economic interactions and linka ...
... based on the use of a distributed ledger, 3 are an innovation that could have a range of impacts on various aspects of financial markets and the wider economy. These impacts could include potential disruption to business models and systems, as well as facilitating new economic interactions and linka ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Exchange Rate Theory and Practice
... tioning the assumption of rational expectations as it is formulated in Mussa’s paper and elsewhere. The first involves the possibility of speculative bubbles where the actual exchange rate can move even in a different direction than its “fundamental” value. The second involves the use of an incorrec ...
... tioning the assumption of rational expectations as it is formulated in Mussa’s paper and elsewhere. The first involves the possibility of speculative bubbles where the actual exchange rate can move even in a different direction than its “fundamental” value. The second involves the use of an incorrec ...
The difficulties of the Chinese and Indian exchange rate regimes
... China and India have both attempted distorting the exchange rate in order to foster exports-led growth. This is described as the ‘Bretton Woods II’ framework, where developing countries buy bonds in the US and keep undervalued exchange rates, in order to foster export-led growth. The costs and benef ...
... China and India have both attempted distorting the exchange rate in order to foster exports-led growth. This is described as the ‘Bretton Woods II’ framework, where developing countries buy bonds in the US and keep undervalued exchange rates, in order to foster export-led growth. The costs and benef ...
Optimal monetary and fiscal policy in a currency union Journal of
... country-specific levels of public consumption, and by having the latter yield utility to domestic households. Finally, we model the currency union as being made up of a continuum of small open economies, subject to imperfectly correlated productivity shocks. That modelling choice stands in contrast w ...
... country-specific levels of public consumption, and by having the latter yield utility to domestic households. Finally, we model the currency union as being made up of a continuum of small open economies, subject to imperfectly correlated productivity shocks. That modelling choice stands in contrast w ...
NBER WORKING PAPER SERIES INTERNATIONAL BORROWING, CAPITAL CONTROLS AND THE EXCHANGE RATE:
... in terms of output and employment. Unlike other countries in the region, the crisis was not caused by fiscal imbalances, but triggered by a deteriorating international environment, a misaligned exchange rate and a weak financial system. Indeed, it started before Mexico announced that it could not me ...
... in terms of output and employment. Unlike other countries in the region, the crisis was not caused by fiscal imbalances, but triggered by a deteriorating international environment, a misaligned exchange rate and a weak financial system. Indeed, it started before Mexico announced that it could not me ...
Presentation Outline
... period. Time periods (x-axis) are quarters. An increase in exchange rate is a depreciation of the local currency. ...
... period. Time periods (x-axis) are quarters. An increase in exchange rate is a depreciation of the local currency. ...
PDF
... probability of a future crisis. The main difference between them is that the probit model is based on the standard normal probability density function, whereas the logit model uses an S-shaped logistic function to constrain the probabilities to the [0, 1] interval. Predicated probabilities calculate ...
... probability of a future crisis. The main difference between them is that the probit model is based on the standard normal probability density function, whereas the logit model uses an S-shaped logistic function to constrain the probabilities to the [0, 1] interval. Predicated probabilities calculate ...
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.