Monetary Policy in Emerging Markets
... “financial repression” under which the only financial intermediaries were uncompetitive banks and the government itself, which kept nominal interest rates artificially low (often well below the inflation rate) and allocated capital administratively rather than by market forces.3 Capital inflows and ...
... “financial repression” under which the only financial intermediaries were uncompetitive banks and the government itself, which kept nominal interest rates artificially low (often well below the inflation rate) and allocated capital administratively rather than by market forces.3 Capital inflows and ...
Dollar-Euro Exchange Rate 1999-2004
... differential to explain the weakness of the Euro vis-à-vis the Dollar in 2000-2001. De Grauwe (2000) takes as a starting point fundamental variables that have an impact on exchange rate (growth rate, inflation differential, current account etc.). He points out the fact that it is the unexpected part ...
... differential to explain the weakness of the Euro vis-à-vis the Dollar in 2000-2001. De Grauwe (2000) takes as a starting point fundamental variables that have an impact on exchange rate (growth rate, inflation differential, current account etc.). He points out the fact that it is the unexpected part ...
macroeconomic and growth policies
... inflation, creates huge uncertainty about changes in relative prices, which can be devastating for the information quality of prices and for the efficiency with which resources are used. Behaviour gets distorted as firms and individuals work to spend money quickly, before it diminishes in value. In ...
... inflation, creates huge uncertainty about changes in relative prices, which can be devastating for the information quality of prices and for the efficiency with which resources are used. Behaviour gets distorted as firms and individuals work to spend money quickly, before it diminishes in value. In ...
NBER WORKING PAPER SERIES SUDDEN STOPS, FINANCIAL CRISES AND ORIGINAL
... The pattern of sudden stops in capital flows to emerging market countries in the 1990s and early 2000s has great resonance to events in the first era of globalization between 1880-1914, especially the events in the late 1880s and early 1890s. In those years many emerging countries were beset by a dr ...
... The pattern of sudden stops in capital flows to emerging market countries in the 1990s and early 2000s has great resonance to events in the first era of globalization between 1880-1914, especially the events in the late 1880s and early 1890s. In those years many emerging countries were beset by a dr ...
The spillover effects of unconventional monetary policies in major
... of unconventional monetary policies adopted in developed countries – US, UK, Euro Area and Japan – on developing countries – Brazil, China, India and Russia. We adopt a two stage methodology. First we analyse the financial market impact of FED’s, ECB’s, BoE’s and BoJ’s announcements concerning uncon ...
... of unconventional monetary policies adopted in developed countries – US, UK, Euro Area and Japan – on developing countries – Brazil, China, India and Russia. We adopt a two stage methodology. First we analyse the financial market impact of FED’s, ECB’s, BoE’s and BoJ’s announcements concerning uncon ...
IB Economics Section 3.3 The balance of payments
... The effect on interest rates: A persistent deficit in the current account can have adverse effects on the interest rates and investment in the deficit country. As explained before, a current account deficit can put downward pressure on a nation’s exchange rate, which causes inflation in the deficit ...
... The effect on interest rates: A persistent deficit in the current account can have adverse effects on the interest rates and investment in the deficit country. As explained before, a current account deficit can put downward pressure on a nation’s exchange rate, which causes inflation in the deficit ...
This PDF is a selection from an out-of-print volume from... of Economic Research
... relatively stable currency, usually that of a large trading partner, and using the external price level to anchor domestic prices. In this case monetary policymakers must act to keep domestic interest rates aligned with foreign rates and orient all policy instruments to maintaining the exchange rate ...
... relatively stable currency, usually that of a large trading partner, and using the external price level to anchor domestic prices. In this case monetary policymakers must act to keep domestic interest rates aligned with foreign rates and orient all policy instruments to maintaining the exchange rate ...
Fixed Exchange Rates
... financed partially or totally by foreign borrowing depending on the size of the economy. A small open economy can borrow the entire deficit without crowding out, while a large economy influences world interest rates and thus crowd out private investment. ...
... financed partially or totally by foreign borrowing depending on the size of the economy. A small open economy can borrow the entire deficit without crowding out, while a large economy influences world interest rates and thus crowd out private investment. ...
17 open economy
... There is no role monetary policy can play if a country has a fixed exchange rate. ...
... There is no role monetary policy can play if a country has a fixed exchange rate. ...
Choice Of Exchange Rate Regimes For Developing Countries
... and narrow band exchange rate regimes). A number of emerging market economies integrated or integrating into international capital markets with soft peg regimes have experienced severe currency crisis and economic disruption in the 1990s. As a result, an increasing number of countries are moving tow ...
... and narrow band exchange rate regimes). A number of emerging market economies integrated or integrating into international capital markets with soft peg regimes have experienced severe currency crisis and economic disruption in the 1990s. As a result, an increasing number of countries are moving tow ...
Exchange Rates and the Foreign Exchange Market - uc
... The exchange transactions talked about so far take place on the spot. Spot rate: exchange rate for currency transactions that take place basically immediately. In practice can’t be right away because it typically takes two days for the checks to clear used to make the payments. Forward exchange rate ...
... The exchange transactions talked about so far take place on the spot. Spot rate: exchange rate for currency transactions that take place basically immediately. In practice can’t be right away because it typically takes two days for the checks to clear used to make the payments. Forward exchange rate ...
Chapter 16 Output and the Exchange Rate in the Short Run
... If the representative basket of European goods and services costs 40 euros, the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is ...
... If the representative basket of European goods and services costs 40 euros, the representative U.S. basket costs $50, and the dollar/euro exchange rate is $0.90 per euro, then the price of the European basket in terms of U.S. basket is ...
Quantifying Informational Linkages in a Global Model of Currency
... across currency markets through two distinct channels: (i) the price and order flow in market i depend directly on the contemporaneous and lagged values of the weighted average order flow from the other markets in the system, j 6= i; and (ii) the weak correlation of shocks across different currency ...
... across currency markets through two distinct channels: (i) the price and order flow in market i depend directly on the contemporaneous and lagged values of the weighted average order flow from the other markets in the system, j 6= i; and (ii) the weak correlation of shocks across different currency ...
The Case Against Floating Exchange Rates
... Floating exchange rates remove two main asymmetries of the Bretton Woods system and allow: Central banks abroad to be able to determine their own domestic money supplies The U.S. to have the same opportunity as other countries to influence its exchange rate against foreign currencies ...
... Floating exchange rates remove two main asymmetries of the Bretton Woods system and allow: Central banks abroad to be able to determine their own domestic money supplies The U.S. to have the same opportunity as other countries to influence its exchange rate against foreign currencies ...
here - Canvas
... in Mexico. This is enhancing their productivity and income. Some of this increased income is being used used to buy U.S. exports. A higher standard of living in Mexico will help stem the flow of illegal immigrants to the U.S. ...
... in Mexico. This is enhancing their productivity and income. Some of this increased income is being used used to buy U.S. exports. A higher standard of living in Mexico will help stem the flow of illegal immigrants to the U.S. ...
On the Link between Dollarization and Inflation: Evidence
... Rojas-Suarez 1992);2 (ii) reduces the monetary authorities’ control over domestic liquidity both by increasing the component over which little direct influence can be exerted and by rendering money demand less stable (IMF 2000); (iii) affects the choice of exchange rate regime (Berg and Borensztein ...
... Rojas-Suarez 1992);2 (ii) reduces the monetary authorities’ control over domestic liquidity both by increasing the component over which little direct influence can be exerted and by rendering money demand less stable (IMF 2000); (iii) affects the choice of exchange rate regime (Berg and Borensztein ...
On the Link between Dollarization and Inflation: Evidence from Turkey* by
... Rojas-Suarez 1992);2 (ii) reduces the monetary authorities’ control over domestic liquidity both by increasing the component over which little direct influence can be exerted and by rendering money demand less stable (IMF 2000); (iii) affects the choice of exchange rate regime (Berg and Borensztein ...
... Rojas-Suarez 1992);2 (ii) reduces the monetary authorities’ control over domestic liquidity both by increasing the component over which little direct influence can be exerted and by rendering money demand less stable (IMF 2000); (iii) affects the choice of exchange rate regime (Berg and Borensztein ...
Lecture02.1
... development of modern banking: the invention of checks. A check is an instruction from you to your bank to transfer money from your account to someone else’s account when she deposits the check. Checks allow transactions to take place without the need to carry around large amounts of currency. The i ...
... development of modern banking: the invention of checks. A check is an instruction from you to your bank to transfer money from your account to someone else’s account when she deposits the check. Checks allow transactions to take place without the need to carry around large amounts of currency. The i ...
Exchange rates and export performance: evidence from micro-data
... a diverse range of international operations may feel little ...
... a diverse range of international operations may feel little ...
S025358_en.pdf
... another dimension of people’s confidence in a currency. Confidence is a fuzzy concept, itself based on past experience and expectations. It entails building a social contract between policy makers and policy takers that, ultimately, has to be analysed in terms of political economy. In the 1990s, two ...
... another dimension of people’s confidence in a currency. Confidence is a fuzzy concept, itself based on past experience and expectations. It entails building a social contract between policy makers and policy takers that, ultimately, has to be analysed in terms of political economy. In the 1990s, two ...
It`s the end of the Dollar as we know it, and I feel fine
... The US dollar is in the middle of a long term decline, and most economists argue it is a consequence of the fundamentals driven by the “twin deficits.” This paper argues the decline represents the end of the dollar’s reign as the international reserve currency (IRC). The paper begins with a discussi ...
... The US dollar is in the middle of a long term decline, and most economists argue it is a consequence of the fundamentals driven by the “twin deficits.” This paper argues the decline represents the end of the dollar’s reign as the international reserve currency (IRC). The paper begins with a discussi ...
North American Free Trade Agreement (NAFTA)
... Substitution refers to the use of foreign money only as means of exchange. Thus, an economy can be highly dollarized, but not subject to currency substitution. Domestic currency may still be used for transactions. Liability Dollarization - A key point that has emerged in the recent literature of cur ...
... Substitution refers to the use of foreign money only as means of exchange. Thus, an economy can be highly dollarized, but not subject to currency substitution. Domestic currency may still be used for transactions. Liability Dollarization - A key point that has emerged in the recent literature of cur ...
Understanding Bilateral Exchange Rate Volatility
... In our empirical estimates we examine the determinants of bilateral exchange rate volatility in a broad cross section of countries, using a number of standard OCA variables that have been employed in the literature, such as trade interdependence, differences in economic shocks, and country size. We ...
... In our empirical estimates we examine the determinants of bilateral exchange rate volatility in a broad cross section of countries, using a number of standard OCA variables that have been employed in the literature, such as trade interdependence, differences in economic shocks, and country size. We ...
Invoice Currency: puzzling evidence and new questions from Brazil
... was the way to deal with that restriction. The changes in the economic environment and the resulting increased availability of foreign currencies overcame this restraint in an environment where restrictions on foreign exchange were also progressively removed. Alongside this policy change, another go ...
... was the way to deal with that restriction. The changes in the economic environment and the resulting increased availability of foreign currencies overcame this restraint in an environment where restrictions on foreign exchange were also progressively removed. Alongside this policy change, another go ...
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.