Feasibility of a Monetary Union in the East African Community
... GDP (y*), domestic real GDP ( y), real exchange rate (e) and domestic price level (p), which are all in log difference forms. The matrix Ai is a 4x4 matrix that provides the impulse responses of endogenous variables to structural shocks. ϵ = [ϵts*, ϵts, ϵtd, ϵtm]‟, comprising of external world suppl ...
... GDP (y*), domestic real GDP ( y), real exchange rate (e) and domestic price level (p), which are all in log difference forms. The matrix Ai is a 4x4 matrix that provides the impulse responses of endogenous variables to structural shocks. ϵ = [ϵts*, ϵts, ϵtd, ϵtm]‟, comprising of external world suppl ...
The Making of the Turkish Financial Crisis
... earlier peg had encouraged. Public finances were squeezed from rising external and domestic debt servicing obligations due to the collapse of the currency and the hike in interest rates. Fiscal austerity and monetary tightening have served to deepen recession, and even growth in exports has remained ...
... earlier peg had encouraged. Public finances were squeezed from rising external and domestic debt servicing obligations due to the collapse of the currency and the hike in interest rates. Fiscal austerity and monetary tightening have served to deepen recession, and even growth in exports has remained ...
macroeconomics and growth policy note
... efforts to reduce it further may have smaller benefits and increasing costs, especially when traditional contractionary monetary policy is the only instrument used to fight it. As we’ll discuss below, this may dampen employment in the short -term and growth in the longer-term. Much of the importanc ...
... efforts to reduce it further may have smaller benefits and increasing costs, especially when traditional contractionary monetary policy is the only instrument used to fight it. As we’ll discuss below, this may dampen employment in the short -term and growth in the longer-term. Much of the importanc ...
Why the Dollar Needs to Fall Further
... States—is that many of their governments follow interventionist policies in currency markets that short-circuit the type of market correction in the dollar’s value now occurring with the euro and other major currencies. Many East Asian countries either peg their exchange rates at artificially low va ...
... States—is that many of their governments follow interventionist policies in currency markets that short-circuit the type of market correction in the dollar’s value now occurring with the euro and other major currencies. Many East Asian countries either peg their exchange rates at artificially low va ...
An interest rate defense of a fixed exchange rate?
... see that this requires a departure from uncovered interest parity (UIP), which was a basic KFG building block. UIP implies that the domestic currency interest rate is the passive reflection of devaluation expectations. There is, therefore, no room for active interest rate policy. A policy-responsive ...
... see that this requires a departure from uncovered interest parity (UIP), which was a basic KFG building block. UIP implies that the domestic currency interest rate is the passive reflection of devaluation expectations. There is, therefore, no room for active interest rate policy. A policy-responsive ...
CHAPTER 16—MACROECONOMIC POLICY IN AN OPEN
... from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part. ...
... from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part. ...
CHAPTER 12 - Economics
... 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 ...
Types of money
... increasing or lowering government borrowing increasing or lowering government spending manipulation of exchange rates raising or lowering bank reserve requirements regulation or prohibition of private currencies taxation or tax breaks on imports or exports of capital into a country ...
... increasing or lowering government borrowing increasing or lowering government spending manipulation of exchange rates raising or lowering bank reserve requirements regulation or prohibition of private currencies taxation or tax breaks on imports or exports of capital into a country ...
Exchange Rate
... rate is effected through an official announcement by the central bank. 5. What is the country’s foreign exchange policy? At present, the country's exchange rate policy supports a freely floating exchange rate system whereby the Bangko Sentral ng Pilipinas (BSP) leaves the determination of the exchan ...
... rate is effected through an official announcement by the central bank. 5. What is the country’s foreign exchange policy? At present, the country's exchange rate policy supports a freely floating exchange rate system whereby the Bangko Sentral ng Pilipinas (BSP) leaves the determination of the exchan ...
Japanese yen and East-Asian currencies: before and after the Asian
... Table 1 shows some statistics of the data and Figure 1 illustrates the movements of the values of the six currencies ( EX tI , EX tK , EX tP , EX tT , EX t J , EX tU ). The estimation of equation (1) requires tests for the presence of unit roots in the variables included in the equation. Table 2 sho ...
... Table 1 shows some statistics of the data and Figure 1 illustrates the movements of the values of the six currencies ( EX tI , EX tK , EX tP , EX tT , EX t J , EX tU ). The estimation of equation (1) requires tests for the presence of unit roots in the variables included in the equation. Table 2 sho ...
Proceedings of World Business and Social Science Research Conference
... Indonesia has been implementing the strategy of exchange rate determination by making international relationship since new order era (1967). That openness brings Indonesia to have a managed-floating system (1967 – 1997) and floating system (1998 – current) with short-run adjustment by intervention t ...
... Indonesia has been implementing the strategy of exchange rate determination by making international relationship since new order era (1967). That openness brings Indonesia to have a managed-floating system (1967 – 1997) and floating system (1998 – current) with short-run adjustment by intervention t ...
Uncleared margin rules: Currency investors brace for change
... Uncleared margin rules Currency investors brace for change The currency market is one of the largest and most liquid financial market with an average daily volume of $5.1 trillion.1 Participants in this market include corporations, pension funds, financial institutions, central banks and many others ...
... Uncleared margin rules Currency investors brace for change The currency market is one of the largest and most liquid financial market with an average daily volume of $5.1 trillion.1 Participants in this market include corporations, pension funds, financial institutions, central banks and many others ...
Corporate Leverage and Currency Crises - S-WoPEc
... opportunities are feasible and the investments will always take place, and hence there is no need for currency depreciation. However, in this model we show that exporting …rms have an incentive to …nance their risky projects with debt instead of equity, even if equity …nancing is readily available t ...
... opportunities are feasible and the investments will always take place, and hence there is no need for currency depreciation. However, in this model we show that exporting …rms have an incentive to …nance their risky projects with debt instead of equity, even if equity …nancing is readily available t ...
Current account reversals and currency crises: empirical
... banks refused to roll over their short-term foreign currency assets vis-avis offshore and onshore Korean banks. The attempts by the central bank to shore up the foreign liquidity position of banks simply led to the rapid loss of foreign currency reserves and the collapse of the currency. Insofar as ...
... banks refused to roll over their short-term foreign currency assets vis-avis offshore and onshore Korean banks. The attempts by the central bank to shore up the foreign liquidity position of banks simply led to the rapid loss of foreign currency reserves and the collapse of the currency. Insofar as ...
Current Research Journal of Economic Theory 4(4): 120-131, 2012 ISSN: 2042-485X
... introduced by Mundell (1961) and McKinnon (1963) and elaborated by Blanchard and Quah (1989), Vaubel (1978) and Krugman (1993), among others. The OCA theory focuses on whether or not the existence of a single currency in a particular geographical region would maximize economic efficiency. In other w ...
... introduced by Mundell (1961) and McKinnon (1963) and elaborated by Blanchard and Quah (1989), Vaubel (1978) and Krugman (1993), among others. The OCA theory focuses on whether or not the existence of a single currency in a particular geographical region would maximize economic efficiency. In other w ...
The Current Account and the Exchange Rate
... The issue of seigniorage has been the “root of all evils” in many emerging markets, especially developing countries in Latin America and Africa. Money has become worthless, so that “currency reforms” – a change of the monetary unit – have been necessary in Argentina, Bolivia, Peru, Mexico and Ecuado ...
... The issue of seigniorage has been the “root of all evils” in many emerging markets, especially developing countries in Latin America and Africa. Money has become worthless, so that “currency reforms” – a change of the monetary unit – have been necessary in Argentina, Bolivia, Peru, Mexico and Ecuado ...
The new currency boards and discretion: empirical
... in monetary policy reduces the prospects for long-term growth. There are times when you must accept losses in the short term to make greater gains later. Hong Kong has one of the world’s best long-term records of economic growth. The currency board system has contributed to it, by enabling Hong Kong ...
... in monetary policy reduces the prospects for long-term growth. There are times when you must accept losses in the short term to make greater gains later. Hong Kong has one of the world’s best long-term records of economic growth. The currency board system has contributed to it, by enabling Hong Kong ...
LESSON - 27 FOREIGN EXCHANGE – 2 EXCHANGE CONTROL
... change while a flexible rate does is no evidence that the former means greater stability in any more fundamental sense. 2. The system of flexible exchange rates, with its associated uncertainties, makes it impossible for exporters and importers to be certain about the price they will have to pay or ...
... change while a flexible rate does is no evidence that the former means greater stability in any more fundamental sense. 2. The system of flexible exchange rates, with its associated uncertainties, makes it impossible for exporters and importers to be certain about the price they will have to pay or ...
Real Exchange Rates for the Year 2000
... and the Quarterly National Accounts (QNA) and Monthly Economic Indicators (MEI) published by the OECD. The series are extracted for the G7 countries (Japan, the United States, Canada, the United Kingdom, France, Italy, and Germany) and for world aggregates as appropriate. We try to ensure that the d ...
... and the Quarterly National Accounts (QNA) and Monthly Economic Indicators (MEI) published by the OECD. The series are extracted for the G7 countries (Japan, the United States, Canada, the United Kingdom, France, Italy, and Germany) and for world aggregates as appropriate. We try to ensure that the d ...
GE05-Whalley-06DEC 225735 en
... where no tariff liberalization occurs. We can also consider services liberalization in a tariff-free world, and tariff liberalization in a world either with or without service restrictions. Finally, we can consider joint tariff and services liberalization. This joint spatial inter-temporal economy can ...
... where no tariff liberalization occurs. We can also consider services liberalization in a tariff-free world, and tariff liberalization in a world either with or without service restrictions. Finally, we can consider joint tariff and services liberalization. This joint spatial inter-temporal economy can ...
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.