INTRODUCTION DOLLARS, DEFICITS, AND TRADE James A. Dorn
... countries, and the respectable growth of the United States, Great Britain, and Europe during much of the l980s have resulted in large part from following the Humean recipe. The future holds great potential for continued growth ofthe world economy, but the extent towhich this potential is realized wi ...
... countries, and the respectable growth of the United States, Great Britain, and Europe during much of the l980s have resulted in large part from following the Humean recipe. The future holds great potential for continued growth ofthe world economy, but the extent towhich this potential is realized wi ...
Net capital flows and real exchange rate depreciation effects on the business cycle in emerging market:
... francs. A rise in the index represents an appreciation. See Appendix B for details in the computation of this index. Given the nature of the empirical relationships to investigate in this study, this index was considered a better proxy than the effective exchange rate or the bilateral exchange rate, ...
... francs. A rise in the index represents an appreciation. See Appendix B for details in the computation of this index. Given the nature of the empirical relationships to investigate in this study, this index was considered a better proxy than the effective exchange rate or the bilateral exchange rate, ...
Ho(313).pdf
... The currency exchange market is the world’s largest market in terms of daily trading volume, in excess of US$1.9 trillion, which is far larger than even the world’s combined bond or stock markets.i Imports and exports of goods and services, coupled with international capital flows could only account ...
... The currency exchange market is the world’s largest market in terms of daily trading volume, in excess of US$1.9 trillion, which is far larger than even the world’s combined bond or stock markets.i Imports and exports of goods and services, coupled with international capital flows could only account ...
External Constraints on Monetary Policy and The Financial Accelerator
... peg were more likely to have su®ered severe ¯nancial distress. The likely reason is straightforward: defending an exchange rate peg generally requires a central bank to adjust interest rates in a direction that reinforces the crisis. Moreover, this connection between external constraints on monetary ...
... peg were more likely to have su®ered severe ¯nancial distress. The likely reason is straightforward: defending an exchange rate peg generally requires a central bank to adjust interest rates in a direction that reinforces the crisis. Moreover, this connection between external constraints on monetary ...
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research
... change rate. The net devaluation amounted to about 37 per cent in imports, and a mere 13 per cent in exports, compared with the gross (formal) devaluation of 67 per cent. To the extent that a net devaluation did take place, it was apparently motivated not so much, if at all, by any current pressure ...
... change rate. The net devaluation amounted to about 37 per cent in imports, and a mere 13 per cent in exports, compared with the gross (formal) devaluation of 67 per cent. To the extent that a net devaluation did take place, it was apparently motivated not so much, if at all, by any current pressure ...
Download attachment
... country's "equilibrium rate of exchange" will be taken to be that which, given levels of domestic prices and costs that it is impossible or undesirable to alter and trade restriction policies that it is not wished to alter, will balance international payments without any significant net inward or ou ...
... country's "equilibrium rate of exchange" will be taken to be that which, given levels of domestic prices and costs that it is impossible or undesirable to alter and trade restriction policies that it is not wished to alter, will balance international payments without any significant net inward or ou ...
The Euro Area`s Exchange Rate Policy and the Experience with
... gain competitiveness at the detriment of the others may fuel resentment and stoke protectionist pressures. It falls upon the Commission and the Council to ensure the respect of this Treaty provision. Second, consider EU countries which do take part in ERM-II. ERM-II is an exchange rate arrangement t ...
... gain competitiveness at the detriment of the others may fuel resentment and stoke protectionist pressures. It falls upon the Commission and the Council to ensure the respect of this Treaty provision. Second, consider EU countries which do take part in ERM-II. ERM-II is an exchange rate arrangement t ...
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 ...
References
... loans, bonds, etc.) even more than wages, as these do not track inflation. Most of the money from foreign sources (remittances, foreign investments, tourism, foreign aid, exports/imports) tends to maintain its purchasing power because exchange rates adjust to inflation very rapidly. Even so, some fo ...
... loans, bonds, etc.) even more than wages, as these do not track inflation. Most of the money from foreign sources (remittances, foreign investments, tourism, foreign aid, exports/imports) tends to maintain its purchasing power because exchange rates adjust to inflation very rapidly. Even so, some fo ...
International Aspects of U.S. Monetary and Fiscal Policy Paul Krugman* Introduction
... policies; but until mid-1982 the United States was more determined in this respect than most others. Indeed, despite the fiscal stimulus the United States managed to have a deeper recession than the rest of the industrial world. The impacts of this divergence in policies on the world economy in gene ...
... policies; but until mid-1982 the United States was more determined in this respect than most others. Indeed, despite the fiscal stimulus the United States managed to have a deeper recession than the rest of the industrial world. The impacts of this divergence in policies on the world economy in gene ...
Chapter 14 Money in the Open Economy
... 6) A principal reason that purchasing power parity does not hold exactly in practice is A) that foreign and domestic assets are not perfect substitutes. B) the existence of non-traded goods. C) that consumers in different countries have different preferences. D) that costs of production are not the ...
... 6) A principal reason that purchasing power parity does not hold exactly in practice is A) that foreign and domestic assets are not perfect substitutes. B) the existence of non-traded goods. C) that consumers in different countries have different preferences. D) that costs of production are not the ...
the terms of the debate
... endowments of factors of production such as labor, capital, and land. Trade raises world income and ...
... endowments of factors of production such as labor, capital, and land. Trade raises world income and ...
Chapter 16 Output and the Exchange Rate: the Short-Run
... Permanent shifts in the money supply cause sharper exchange rate movements and therefore have stronger short-run effects on output than transitory shifts. If exports and imports adjust gradually to real exchange rate changes, the current account may follow a J-curve pattern after a real currency dep ...
... Permanent shifts in the money supply cause sharper exchange rate movements and therefore have stronger short-run effects on output than transitory shifts. If exports and imports adjust gradually to real exchange rate changes, the current account may follow a J-curve pattern after a real currency dep ...
Deciding to Enter a Monetary Union
... as trade with the euro area (imports and exports) as percent of GDP. From 1990 until 2002, the share of intraregional trade of the largest economies of the euro area (Germany, France, Italy and Spain) increased from 16 to 23 percent of GDP. On the other hand, the U.K., who belongs to the EU but not ...
... as trade with the euro area (imports and exports) as percent of GDP. From 1990 until 2002, the share of intraregional trade of the largest economies of the euro area (Germany, France, Italy and Spain) increased from 16 to 23 percent of GDP. On the other hand, the U.K., who belongs to the EU but not ...
NBER WORKING PAPER SERIES Pierpaolo Benigno Working Paper 12219
... Recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country. This paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation ...
... Recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country. This paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation ...
86007026I_en.pdf
... fluctuations. Pegged rates, in contrast, may be more akin to persistent misalignments and hence less supportive to export growth. Nilsson and Nilsson (2000), using a gravity model for more than 100 countries, find that more flexible regimes favour export growth and, by implication, GDP growth.5 Thir ...
... fluctuations. Pegged rates, in contrast, may be more akin to persistent misalignments and hence less supportive to export growth. Nilsson and Nilsson (2000), using a gravity model for more than 100 countries, find that more flexible regimes favour export growth and, by implication, GDP growth.5 Thir ...
Chap_22
... • A banking crisis may result from a debt crisis. – High default rates on loans made by banks reduce their income to pay for liabilities and may increase bankruptcy. – If depositors fear bankruptcy due to possible devaluation of the currency or default on government debt (assets for banks), then the ...
... • A banking crisis may result from a debt crisis. – High default rates on loans made by banks reduce their income to pay for liabilities and may increase bankruptcy. – If depositors fear bankruptcy due to possible devaluation of the currency or default on government debt (assets for banks), then the ...
Market Integration and Contagion in Asian Emerging Stock and
... international asset pricing model (ICAPM) in the absence of purchasing power parity (PPP) using an asymmetric multivariate GARCH-in-Mean (MGARCH-M) approach. Also examined in this paper is whether there are pure contagion effects between stock and foreign exchange markets for each Asian country duri ...
... international asset pricing model (ICAPM) in the absence of purchasing power parity (PPP) using an asymmetric multivariate GARCH-in-Mean (MGARCH-M) approach. Also examined in this paper is whether there are pure contagion effects between stock and foreign exchange markets for each Asian country duri ...
Law of the Republic of Kazakhstan on Currency
... valuables by residents and non-residents, and specifies the goals, objectives, and procedure for currency regulation and currency control. CHAPTER 1. GENERAL PROVISIONS Article 1. Basic definitions used in this Law The Law uses the following basic concepts: ...
... valuables by residents and non-residents, and specifies the goals, objectives, and procedure for currency regulation and currency control. CHAPTER 1. GENERAL PROVISIONS Article 1. Basic definitions used in this Law The Law uses the following basic concepts: ...
NBER WORKING PAPERS SERIES THE FRANC ZONE IN AFRICA
... leads to an activist, discretionary stance. The exchange rate has to be managed flexibly: the authorities need to respond to external shocks (such as terms of trade changes) or domestic price shocks by undertaking the requisite combination of expenditure-switching (i.e., exchange rate) and expenditu ...
... leads to an activist, discretionary stance. The exchange rate has to be managed flexibly: the authorities need to respond to external shocks (such as terms of trade changes) or domestic price shocks by undertaking the requisite combination of expenditure-switching (i.e., exchange rate) and expenditu ...
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.