REAL EFFECTS OF DEVALUATION IN INDEBTED AND RISKY ECONOMIES
... Developing countries are scared stiff of devaluations that inflict negative impacts on domestic economic activity. Indeed, in the last decades there are several examples where devaluations – triggered or not by currency crises – have been followed, at least in the short run, by severe losses in term ...
... Developing countries are scared stiff of devaluations that inflict negative impacts on domestic economic activity. Indeed, in the last decades there are several examples where devaluations – triggered or not by currency crises – have been followed, at least in the short run, by severe losses in term ...
The advantages and disadvantages of various exchange rate regimes
... in the country’s international price competitiveness. For example, the appreciation of the dollar from 1995 and 2001 was also an appreciation for whatever currencies were linked to the dollar. Regardless the extent to which one considers the late-1990s dollar appreciation to have been based in the f ...
... in the country’s international price competitiveness. For example, the appreciation of the dollar from 1995 and 2001 was also an appreciation for whatever currencies were linked to the dollar. Regardless the extent to which one considers the late-1990s dollar appreciation to have been based in the f ...
Regulating international finance and the diversity of capitalism
... more (by neoclassical economists) or less (by Keynesian economists) selfregulating machine that can be adjusted and optimized through the buttons and levers of economic policy. Crises are interpreted as regulatory failures in the adjustment of the economic machinery and crisis management is seen in ...
... more (by neoclassical economists) or less (by Keynesian economists) selfregulating machine that can be adjusted and optimized through the buttons and levers of economic policy. Crises are interpreted as regulatory failures in the adjustment of the economic machinery and crisis management is seen in ...
Europe`s Great Depression: coordination failure after the First World
... least because the US refused to participate. Some countries returned to the gold standard at parities on or close to the pre-war levels (such as Britain in 1925) which proved to put deflationary pressure on the economy. Others, such as France (de facto in 1926, de jure in 1928), returned at much low ...
... least because the US refused to participate. Some countries returned to the gold standard at parities on or close to the pre-war levels (such as Britain in 1925) which proved to put deflationary pressure on the economy. Others, such as France (de facto in 1926, de jure in 1928), returned at much low ...
CURRENCY COMPETITION VERSUS GOVERNMENTAL MONEY MONOPOLIES Roland Vaubel
... Typically, central bankers object to international currency competition on the grounds that it renders national monetary management more difficult and risky, and it destabilizes exchange rates and the whole international monetary system. It is true that a spatial money monopolist enjoys a quieter li ...
... Typically, central bankers object to international currency competition on the grounds that it renders national monetary management more difficult and risky, and it destabilizes exchange rates and the whole international monetary system. It is true that a spatial money monopolist enjoys a quieter li ...
STRICT DOLLARIZATION AND ECONOMIC PERFORMANCE: An Empirical Investigation Sebastian Edwards
... This policy option has received the name of “official dollarization,” even if the advanced country’s currency is other than the dollar. There is wide agreement among economists that countries that give up their currency, and delegate monetary policy to an advanced country’s (conservative) central ba ...
... This policy option has received the name of “official dollarization,” even if the advanced country’s currency is other than the dollar. There is wide agreement among economists that countries that give up their currency, and delegate monetary policy to an advanced country’s (conservative) central ba ...
File - GBM/381 International Trade Instructor: Charissa
... – External disequilibria are automatically corrected by exchange rate movements. – Avoid mistaken or distortionary government determination of exchange rates – Are more efficient since resources are not required to manage the exchange rate system – Provide some insulation to the domestic economy ...
... – External disequilibria are automatically corrected by exchange rate movements. – Avoid mistaken or distortionary government determination of exchange rates – Are more efficient since resources are not required to manage the exchange rate system – Provide some insulation to the domestic economy ...
Slides - James Ashley Morrison
... One notable country decided to return to gold and demonstrate a most serious commitment to the standard… ...
... One notable country decided to return to gold and demonstrate a most serious commitment to the standard… ...
CHAPTER 13 Capital Mobility and the Exchange Rate in the IS
... c. The policy described in this problem is always a beggar-thy-neighbor policy. However, depending on their situations, other countries may not mind if they experience inflationary pressure. Application Questions: 1. An increase in government purchases (G) will increase the level of output (Y) and i ...
... c. The policy described in this problem is always a beggar-thy-neighbor policy. However, depending on their situations, other countries may not mind if they experience inflationary pressure. Application Questions: 1. An increase in government purchases (G) will increase the level of output (Y) and i ...
301LONU4K2
... Challenges of Doing Business in Emerging Markets (cont.) • Poor physical infrastructure: Basic elements of infrastructure, such as high-quality roads, drainage systems, sewers, and electrical utilities, are often sorely lacking in emerging markets. • Partner availability and qualifications: Given e ...
... Challenges of Doing Business in Emerging Markets (cont.) • Poor physical infrastructure: Basic elements of infrastructure, such as high-quality roads, drainage systems, sewers, and electrical utilities, are often sorely lacking in emerging markets. • Partner availability and qualifications: Given e ...
Research on U.S. Monetary Policy Shocks on Foreign Trade of
... changes. It is complicated. United States expansionary monetary policy has a faint positive spillover effect on exports of Zhejiang Province at the first period, but at the second period to zero. It is negative later until the 10th to zero again. After the financial crisis, United States has taken a ...
... changes. It is complicated. United States expansionary monetary policy has a faint positive spillover effect on exports of Zhejiang Province at the first period, but at the second period to zero. It is negative later until the 10th to zero again. After the financial crisis, United States has taken a ...
PDF
... "cohesion," EC jargon for eliminating national income disparities. Monetary union, not to mention other aspects of the Single Market Program, is viewed as viable only if incomes and productivity in the poorer member states of the Community are brought closer to Community average. ...
... "cohesion," EC jargon for eliminating national income disparities. Monetary union, not to mention other aspects of the Single Market Program, is viewed as viable only if incomes and productivity in the poorer member states of the Community are brought closer to Community average. ...
THE INTERNATIONAL MONETARY SHOULD IT BE REFORMED? Working Paper No. 2163
... itself, however, this should be viewed as one of the achievements of the monetary system. ...
... itself, however, this should be viewed as one of the achievements of the monetary system. ...
7 Determinants of the Canada
... In an empirical paper, Chen and Rogoff (2003) investigate whether there is, indeed, a correlation between world commodity prices and the exchange rates of 3 developed countries, Canada, New Zealand, and Australia. They come to the conclusion that commodity price fluctuations are key identifiers in e ...
... In an empirical paper, Chen and Rogoff (2003) investigate whether there is, indeed, a correlation between world commodity prices and the exchange rates of 3 developed countries, Canada, New Zealand, and Australia. They come to the conclusion that commodity price fluctuations are key identifiers in e ...
EMU strategies: Lessons from Greece in view of the EU Enlargement
... ERM, and the European Currency Unit, ECU. The ERM set a central exchange rate towards the ECU for each participating currency. On the basis of such rates, bilateral “central rates” were established. The fluctuation margins around bilateral central rates were fixed at 2.25% for all currencies except ...
... ERM, and the European Currency Unit, ECU. The ERM set a central exchange rate towards the ECU for each participating currency. On the basis of such rates, bilateral “central rates” were established. The fluctuation margins around bilateral central rates were fixed at 2.25% for all currencies except ...
Working Paper 12-15: Choice and Coercion in East Asian Exchange
... Analysis of the exchange rate policies of East Asian countries begins with a clear description of them; unfortunately, that is not a simple matter. First, we cannot take the declarations of countries about their national currency regimes at face value; those policies are largely opaque and sometimes ...
... Analysis of the exchange rate policies of East Asian countries begins with a clear description of them; unfortunately, that is not a simple matter. First, we cannot take the declarations of countries about their national currency regimes at face value; those policies are largely opaque and sometimes ...
Chapter 18: The Open Economy
... Exports and Imports The behavior of exports and imports in the United States is characterized by: A sharp decline in both exports and imports between 1929 and 1936 as a result of the Smoot-Hawley Act of 1930. Three episodes of surpluses and deficits: The trade surpluses of the 1940s. The ...
... Exports and Imports The behavior of exports and imports in the United States is characterized by: A sharp decline in both exports and imports between 1929 and 1936 as a result of the Smoot-Hawley Act of 1930. Three episodes of surpluses and deficits: The trade surpluses of the 1940s. The ...
An electricity-backed currency proposal
... An economic risk is that the market represented by the asset backing a currency may become economically distorted by the central bank’s purchases. Ideally, the central bank should manage currency stability in Purchasing Power Parity (PPP) terms. An economic promise for electrical energy delivered us ...
... An economic risk is that the market represented by the asset backing a currency may become economically distorted by the central bank’s purchases. Ideally, the central bank should manage currency stability in Purchasing Power Parity (PPP) terms. An economic promise for electrical energy delivered us ...
On the Political Economy of Monetary Policy
... David Gordon’s influential article (1983), which deals with the problem of dynamic inconsistency and the pros and cons of rules versus discretion in economic policy, which Finn Kydland and Edward Prescott (1977) and Guillermo Calvo (1978) had previously posed. In turn, the “rules versus discretion” ...
... David Gordon’s influential article (1983), which deals with the problem of dynamic inconsistency and the pros and cons of rules versus discretion in economic policy, which Finn Kydland and Edward Prescott (1977) and Guillermo Calvo (1978) had previously posed. In turn, the “rules versus discretion” ...
FE_04 - University of Hawaii
... inflation declines; unemployment up; interest rates rise. The current account moves toward deficit due to the exchange rate change, but may be partly offset due to falling ...
... inflation declines; unemployment up; interest rates rise. The current account moves toward deficit due to the exchange rate change, but may be partly offset due to falling ...
overcoming the zero bound with negative interest rate policy
... Mechanics of Negative Interest Policy (4) • To remove entirely the “arbitrage opportunity” constraint on negative nominal interest rate policy due to the presence of currency the central bank could: 1) Eliminate currency entirely and permanently 2) Continue to provide currency demanded elastically ...
... Mechanics of Negative Interest Policy (4) • To remove entirely the “arbitrage opportunity” constraint on negative nominal interest rate policy due to the presence of currency the central bank could: 1) Eliminate currency entirely and permanently 2) Continue to provide currency demanded elastically ...
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.