S0212088_en.pdf
... have had diverging exchange rate (ER) policies, at least formally.1 A straight observation of recent events is that countries with pegged systems, such as the currency boards Hong Kong and Argentina, did suffer significant contagion in times of international financial stress. Argentina experienced d ...
... have had diverging exchange rate (ER) policies, at least formally.1 A straight observation of recent events is that countries with pegged systems, such as the currency boards Hong Kong and Argentina, did suffer significant contagion in times of international financial stress. Argentina experienced d ...
The Endogeneity of the Optimum Currency Area Criteria
... into industry-specific and country-specific components. Bayoumi and Eichengreen (1993a,b,c, 1994) argue that these studies conflate information on the incidence of disturbances and on economies’ responses. Accordingly, Bayoumi and Eichengreen use structural vector autoregressions to distinguish unde ...
... into industry-specific and country-specific components. Bayoumi and Eichengreen (1993a,b,c, 1994) argue that these studies conflate information on the incidence of disturbances and on economies’ responses. Accordingly, Bayoumi and Eichengreen use structural vector autoregressions to distinguish unde ...
DP2001/03 Would adopting the Australian dollar provide superior monetary policy in New Zealand?
... another through trade and capital flows, the management of the exchange rate regime is a critical factor in economic policy making, and the choice of regime is always controversial. The debate over whether New Zealand should continue to maintain an independent currency, or form a currency union with ...
... another through trade and capital flows, the management of the exchange rate regime is a critical factor in economic policy making, and the choice of regime is always controversial. The debate over whether New Zealand should continue to maintain an independent currency, or form a currency union with ...
M25_MishkinEakins3427056_08_FMI_C25
... Stage One: Initiation Crisis initiation can also involve severe fiscal imbalances: •The government faces a large deficit and either cajoles or forces banks to buy gov’t bonds •If confidence falls, the gov’t bonds are sold by investors, leading to a price decline •As a result, bank balance sheets de ...
... Stage One: Initiation Crisis initiation can also involve severe fiscal imbalances: •The government faces a large deficit and either cajoles or forces banks to buy gov’t bonds •If confidence falls, the gov’t bonds are sold by investors, leading to a price decline •As a result, bank balance sheets de ...
The Future of the Dollar-Euro Exchange Rate, 2002
... 15-nation EU is larger than the United States in terms of gross domestic product (GDP), global trade, and population. The Japanese and European shares of world exports have been rising, while the share of U.S. exports seems to have been stagnant (Alogoskoufis & Portes, 1997). Thus, introduction of t ...
... 15-nation EU is larger than the United States in terms of gross domestic product (GDP), global trade, and population. The Japanese and European shares of world exports have been rising, while the share of U.S. exports seems to have been stagnant (Alogoskoufis & Portes, 1997). Thus, introduction of t ...
Chapter 18 PPT
... to redeem their dollar assets before the gold ran out. This problem is similar to what any central bank may face when it tries to maintain a fixed exchange rate. If markets perceive that the central bank does not have enough official international reserve assets to maintain a fixed rate, a balan ...
... to redeem their dollar assets before the gold ran out. This problem is similar to what any central bank may face when it tries to maintain a fixed exchange rate. If markets perceive that the central bank does not have enough official international reserve assets to maintain a fixed rate, a balan ...
Principality of Liechtenstein `AAA/A- 1+`
... which is why we believe that the economy will be able to cope with the recent sudden shift in the CHF/EUR exchange rate. Growth in Liechtenstein can be very volatile because of the small number of contributors to the economy and the country's dependence on major export markets. The limited availabil ...
... which is why we believe that the economy will be able to cope with the recent sudden shift in the CHF/EUR exchange rate. Growth in Liechtenstein can be very volatile because of the small number of contributors to the economy and the country's dependence on major export markets. The limited availabil ...
Demand Imbalances, Exchange-Rate Misalignments, and Monetary Policy
... Misalignments, and Monetary Policy Giancarlo Corsetti IUE, Roma III & CEPR Luca Dedola European Central Bank & CEPR Sylvain Leduc Federal Reserve Bank of San Francisco ...
... Misalignments, and Monetary Policy Giancarlo Corsetti IUE, Roma III & CEPR Luca Dedola European Central Bank & CEPR Sylvain Leduc Federal Reserve Bank of San Francisco ...
Mankiw 5/e Chapter 12: Agg Demand in the Open Economy
... In the early 1990s, Mexico was an attractive place for foreign investment. During 1994, political developments caused an increase in Mexico’s risk premium ( ): • peasant uprising in Chiapas • assassination of leading presidential candidate Another factor: The Federal Reserve raised U.S. interest ra ...
... In the early 1990s, Mexico was an attractive place for foreign investment. During 1994, political developments caused an increase in Mexico’s risk premium ( ): • peasant uprising in Chiapas • assassination of leading presidential candidate Another factor: The Federal Reserve raised U.S. interest ra ...
Mankiw 5/e Chapter 12: Agg Demand in the Open Economy
... In the early 1990s, Mexico was an attractive place for foreign investment. During 1994, political developments caused an increase in Mexico’s risk premium ( ): • peasant uprising in Chiapas • assassination of leading presidential candidate Another factor: The Federal Reserve raised U.S. interest ra ...
... In the early 1990s, Mexico was an attractive place for foreign investment. During 1994, political developments caused an increase in Mexico’s risk premium ( ): • peasant uprising in Chiapas • assassination of leading presidential candidate Another factor: The Federal Reserve raised U.S. interest ra ...
meeting the challenges of macroeconomic convergence criteria
... the prudent supervision of banks, and in the operation of the country-specific elements of union-level monetary and credit policy. On the other hand, the level of their autonomy would be reduced compared to what it had been prior to unification. The capacity of monetary integration in Africa to prov ...
... the prudent supervision of banks, and in the operation of the country-specific elements of union-level monetary and credit policy. On the other hand, the level of their autonomy would be reduced compared to what it had been prior to unification. The capacity of monetary integration in Africa to prov ...
Low Interest Rate Policy and the Use of Reserve Requirements in
... of the investment currency become self-reinforcing. This was perceived to be a major problem of flexible exchange rates during the inter-war period (Eichengreen 2008). By importing the anchor country’s interest rate policy emerging markets can aim to curb volatile cross-border flows and prevent loss ...
... of the investment currency become self-reinforcing. This was perceived to be a major problem of flexible exchange rates during the inter-war period (Eichengreen 2008). By importing the anchor country’s interest rate policy emerging markets can aim to curb volatile cross-border flows and prevent loss ...
NBER WORKING PAPER SERIES DOES EXCHANGE RATE RISK MATTER FOR WELFARE?
... Exchange rate variability is one of the most prominent features of open economy macroeconomics, and a desire to moderate this variability has been a motivation behind the managed exchange rate regimes of many countries as well as European monetary union. This paper conducts a model-consistent evalua ...
... Exchange rate variability is one of the most prominent features of open economy macroeconomics, and a desire to moderate this variability has been a motivation behind the managed exchange rate regimes of many countries as well as European monetary union. This paper conducts a model-consistent evalua ...
presentation slides
... charts plots the density over asset realizations of the bank when = 01 and is varied from 0.1 to 0.3. The right hand chart plots the asset realization density when = 02 and varies from 0.01 to 0.3. ...
... charts plots the density over asset realizations of the bank when = 01 and is varied from 0.1 to 0.3. The right hand chart plots the asset realization density when = 02 and varies from 0.01 to 0.3. ...
Causes of Capital Inflows and Policy Responses to Them
... attracted large capital inflows while stabilization efforts are still in progress—and some countries have received capital inflows despite poor fundamentals. For the sake of simplicity, however, the matrix does not take into account all possible initial conditions and policy imbalances. When a capit ...
... attracted large capital inflows while stabilization efforts are still in progress—and some countries have received capital inflows despite poor fundamentals. For the sake of simplicity, however, the matrix does not take into account all possible initial conditions and policy imbalances. When a capit ...
NBER WORKING PAPER SERIES INTERNATIONAL MACROECONOMIC POLICY COORDINATION Stanley Fischer
... benefit. Even then, and certainly until then, the best that each country can do for other countries is to keep its own economy in shape. ...
... benefit. Even then, and certainly until then, the best that each country can do for other countries is to keep its own economy in shape. ...
Figure 1 - Cengage Learning
... – Increase in the official value of a currency – A unit of a nation’s currency buys more units of foreign currency © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product ...
... – Increase in the official value of a currency – A unit of a nation’s currency buys more units of foreign currency © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product ...
Capital-Account Crisis and Credit Contraction
... domestic macroeconomic performance, such as price inflation, fiscal deficits and low saving rates. For this type of crisis, conventional policies such as tight money, fiscal consolidation, structural reforms, and output- and expenditure-switching exchange rate policy are appropriate. However, econom ...
... domestic macroeconomic performance, such as price inflation, fiscal deficits and low saving rates. For this type of crisis, conventional policies such as tight money, fiscal consolidation, structural reforms, and output- and expenditure-switching exchange rate policy are appropriate. However, econom ...
Demand Imbalances, Exchange Rate Misalignment and Monetary Policy
... European Central Bank and CEPR Sylvain Leduc Federal Reserve Bank of San Francisco This version: November 2010 Abstract In standard open macro models with incomplete markets, inward-looking monetary policies like strict inflation targeting may result in (rather than correcting) misalignments in asse ...
... European Central Bank and CEPR Sylvain Leduc Federal Reserve Bank of San Francisco This version: November 2010 Abstract In standard open macro models with incomplete markets, inward-looking monetary policies like strict inflation targeting may result in (rather than correcting) misalignments in asse ...
Gold, the renminbi and the multi
... points find unequivocal agreement. However, there is a great debate on the system’s future shape. Will the dollar be replaced by another reserve currency? Will we enter a new multicurrency system? What will be the place of China as the world’s No. 2 economy? Is there a role for gold in the new syste ...
... points find unequivocal agreement. However, there is a great debate on the system’s future shape. Will the dollar be replaced by another reserve currency? Will we enter a new multicurrency system? What will be the place of China as the world’s No. 2 economy? Is there a role for gold in the new syste ...
Macroeconomic Policy Regimes in the Philippines By Cayetano
... Additional reforms, however, included the institution of the regional wage boards which shifted the wage setting mechanism from an annual, highly-politicized process which significant uncertainty to a disaggregated system where regions considered locationspecific inflation statistics and demand sit ...
... Additional reforms, however, included the institution of the regional wage boards which shifted the wage setting mechanism from an annual, highly-politicized process which significant uncertainty to a disaggregated system where regions considered locationspecific inflation statistics and demand sit ...
Foreign Direct Investment and Exchange Rates: A Case Study of
... of FDI policies given that there has been an increase in the number of countries adopting floating exchange rates (or abandoning fixed pegs, if only temporarily). FDI brings various advantages to source and host countries. FDI not only brings in capital but also introduces advanced technology that c ...
... of FDI policies given that there has been an increase in the number of countries adopting floating exchange rates (or abandoning fixed pegs, if only temporarily). FDI brings various advantages to source and host countries. FDI not only brings in capital but also introduces advanced technology that c ...
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.