Do China and oil exporters influence major currency configurations?
... the euro against the US dollar by as much as 7 percentage points in 2006. This indeed seems very substantial. Nevertheless, there is strong time variation in the effect of EME communication on major currencies. Few EME policy-makers talked openly about reforming exchange rate regimes or diversifying ...
... the euro against the US dollar by as much as 7 percentage points in 2006. This indeed seems very substantial. Nevertheless, there is strong time variation in the effect of EME communication on major currencies. Few EME policy-makers talked openly about reforming exchange rate regimes or diversifying ...
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... Country-specific situations must be analyzed before even rough estimates of the probable impact of policies on the balance of payments and on the economy can be made. Adjustment by restraining demand alone is a high-cost strategy. The scope of conventional ...
... Country-specific situations must be analyzed before even rough estimates of the probable impact of policies on the balance of payments and on the economy can be made. Adjustment by restraining demand alone is a high-cost strategy. The scope of conventional ...
the evolution of the renminbi exchange rate
... The trading business was done under an experimental trading system for foreign exchange, which was established by the Bank of China in a few areas, such as Beijing, Guangdong, Hefei, Shanghai, and Tianjin. National enterprises holding foreign exchange earned through the system of retention quotas we ...
... The trading business was done under an experimental trading system for foreign exchange, which was established by the Bank of China in a few areas, such as Beijing, Guangdong, Hefei, Shanghai, and Tianjin. National enterprises holding foreign exchange earned through the system of retention quotas we ...
Chapter 22
... denominated debts in Argentina, Mexico, Brazil and Chile to increase drastically. • A worldwide recession and a fall in many commodity prices also hurt export sectors in these countries. • In August 1982, Mexico announced that it could not repay its debts, mostly to private banks. ...
... denominated debts in Argentina, Mexico, Brazil and Chile to increase drastically. • A worldwide recession and a fall in many commodity prices also hurt export sectors in these countries. • In August 1982, Mexico announced that it could not repay its debts, mostly to private banks. ...
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... the range in a set period of time can be a cornerstone in the effort to do Rupiah redenomination, of course, other factors must also be considered. VII. CONCLUSION AND RECOMMENDATIONS. In economic theory, redenomination not cause any impact, contrast and devaluation sanering besides have a direct im ...
... the range in a set period of time can be a cornerstone in the effort to do Rupiah redenomination, of course, other factors must also be considered. VII. CONCLUSION AND RECOMMENDATIONS. In economic theory, redenomination not cause any impact, contrast and devaluation sanering besides have a direct im ...
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 ...
... 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 ...
Impact of exchange rate, inflation rate and interest rate on balance of
... currency value. If the capital account goes into surplus it creates a huge affect on the BOP of a country [1]. The economic crisis in the country can cause a huge affect on the BOP. The regulatory bodies of the countries applied many test to solve this problem [2]. The natural resources of a home co ...
... currency value. If the capital account goes into surplus it creates a huge affect on the BOP of a country [1]. The economic crisis in the country can cause a huge affect on the BOP. The regulatory bodies of the countries applied many test to solve this problem [2]. The natural resources of a home co ...
Jacob A. Frenkel and Morris Goldstein THE INTERNATIONAL MONETARY SYSTEM: Introduction
... consistency of the existing pattern of exchange rates with “fundamentals.” Moreover, interest continues to be expressed in some reform proposals—including a system oftarget zones—that hinge on knowledge of equilibrium exchange rates. Last but not least, the period since the Plaza Agreement (Septembe ...
... consistency of the existing pattern of exchange rates with “fundamentals.” Moreover, interest continues to be expressed in some reform proposals—including a system oftarget zones—that hinge on knowledge of equilibrium exchange rates. Last but not least, the period since the Plaza Agreement (Septembe ...
Cross-Currency Exposures to the Swiss Franc*
... position in the whole international balance sheet and also in the debt subcomponent. In contrast to the advanced group, these long positions became more positive after the crisis. Our study of the determinants of cross-country exposures to the Swiss Franc produces several findings. In general, most ...
... position in the whole international balance sheet and also in the debt subcomponent. In contrast to the advanced group, these long positions became more positive after the crisis. Our study of the determinants of cross-country exposures to the Swiss Franc produces several findings. In general, most ...
Consequences of a current account surplus
... an economy to finance a current account deficit. Foreign investors may eventually take fright, lose confidence and take their money out. Or, they may require higher interest rates to persuade them to keep investing in an economy. Higher interest rates then have the effect of depressing domestic cons ...
... an economy to finance a current account deficit. Foreign investors may eventually take fright, lose confidence and take their money out. Or, they may require higher interest rates to persuade them to keep investing in an economy. Higher interest rates then have the effect of depressing domestic cons ...
Foreign currency borrowing by small firms in emerging markets
... Gardner (2008) ascribe to a dedicated investor base. The deposit rate on domestic dollar deposits (about 5%) is also higher than the international dollar deposit rate (Fig. 2). This difference is not arbitraged away by foreign investors because they are unwilling to exchange internationally liquid a ...
... Gardner (2008) ascribe to a dedicated investor base. The deposit rate on domestic dollar deposits (about 5%) is also higher than the international dollar deposit rate (Fig. 2). This difference is not arbitraged away by foreign investors because they are unwilling to exchange internationally liquid a ...
... originally defined by Congress—was .04838 of an ounce of gold. We teach today—in the context of modern monetary institutions—that the dollar is both a unit of value and a store of value. But the functions can be separated. The government need not produce dollars in order to define the dollar, any mo ...
Munir
... VanWijnbergen, 1986 and Gylfason and Radetzki, 1991). In many developing countries imports consist of predominately noncompetitive intermediate inputs or capital goods. Devaluation increases the domestic currency cost of imported inputs and reduces the volume of imported inputs. A reduction in impor ...
... VanWijnbergen, 1986 and Gylfason and Radetzki, 1991). In many developing countries imports consist of predominately noncompetitive intermediate inputs or capital goods. Devaluation increases the domestic currency cost of imported inputs and reduces the volume of imported inputs. A reduction in impor ...
NBER WORKING PAPER SERIES WHAT HURTS MOST? Carmen M. Reinhart
... depreciates relative to that of country B, rotating the budget line from EF to GF. All else equal, welfare would decline, representing a cost associated with developments on the foreign exchange market for this small country. Target zones for the large countries, if effective, would be able to preve ...
... depreciates relative to that of country B, rotating the budget line from EF to GF. All else equal, welfare would decline, representing a cost associated with developments on the foreign exchange market for this small country. Target zones for the large countries, if effective, would be able to preve ...
Local versus Producer Currency Pricing: Evidence from
... optimal monetary policy literature, ‡exible exchange rates is the optimal response when prices of traded goods are rigid in the producer’s currency. In contrast, a …xed exchange rate regime becomes optimal when prices are rigid in the consumer’s currency2 . In other words, whether the ECB should be ...
... optimal monetary policy literature, ‡exible exchange rates is the optimal response when prices of traded goods are rigid in the producer’s currency. In contrast, a …xed exchange rate regime becomes optimal when prices are rigid in the consumer’s currency2 . In other words, whether the ECB should be ...
Morris Inflationdynamicsandtheparallelmarketforforeignexchange
... implicit assumptions about how (as a matter of Government policy) different components of the budget change in response to the devaluation. Consider first money creation to finance the Government deficit. This is equal to the increase in Government credit on the assumption that money creation is the ...
... implicit assumptions about how (as a matter of Government policy) different components of the budget change in response to the devaluation. Consider first money creation to finance the Government deficit. This is equal to the increase in Government credit on the assumption that money creation is the ...
Working Paper 113 - Lessons from Italian Monetary Unification
... Changes in the wheat market indicate that the South and North after unification (though not probably because of it) increasingly specialised according to their comparative advantages. Coupled with differences in economic behaviour of the Southern economy, this meant that monetary policies appropriat ...
... Changes in the wheat market indicate that the South and North after unification (though not probably because of it) increasingly specialised according to their comparative advantages. Coupled with differences in economic behaviour of the Southern economy, this meant that monetary policies appropriat ...
The Business Cycle, International Linkages, and Exchange
... yclical fluctuations in economic activity are a feature of the behavior of most economies, and an understanding of their patterns and causes is important to the decisions of both policymakers and market participants. The objectives of macroeconomic policy have long included the avoidance of protract ...
... yclical fluctuations in economic activity are a feature of the behavior of most economies, and an understanding of their patterns and causes is important to the decisions of both policymakers and market participants. The objectives of macroeconomic policy have long included the avoidance of protract ...
Working Paper, No. 119 - Wirtschaftswissenschaftliche Fakultät der
... legal basis that they agreed on by joining the EU. On the other hand, the EU introduced institutions to guarantee 1) free trade, 2) stable money and 3) balanced budgets in the 1990s – the very ingredients of the Gladstonian Trinity. First, the Single Market Act guaranteed free factor movement within ...
... legal basis that they agreed on by joining the EU. On the other hand, the EU introduced institutions to guarantee 1) free trade, 2) stable money and 3) balanced budgets in the 1990s – the very ingredients of the Gladstonian Trinity. First, the Single Market Act guaranteed free factor movement within ...
NBER WORKING PAPERS SERIES DESTABILIEING EFFECTS OF EXCHANGE-RATE ESCAPE CLAUSES Maurice Obstfeld
... clauses, analyzing as an example fixed exchange-rate systems that allow member countries the freedom to realign in periods of ...
... clauses, analyzing as an example fixed exchange-rate systems that allow member countries the freedom to realign in periods of ...
A Model of the Twin Ds: Optimal Default and Devaluation ∗ S. Na
... taxes. As mentioned earlier in this introduction, the nominal side of the present model draws from Schmitt-Grohé and Uribe (2013). That paper analyzes the welfare costs of currency pegs vis-à-vis the optimal devaluation policy in the context of a small open economy with downward nominal wage rigid ...
... taxes. As mentioned earlier in this introduction, the nominal side of the present model draws from Schmitt-Grohé and Uribe (2013). That paper analyzes the welfare costs of currency pegs vis-à-vis the optimal devaluation policy in the context of a small open economy with downward nominal wage rigid ...
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.