1 + i
... Interest Rate Parity Defined IRP is a “no arbitrage” condition. If IRP did not hold, then it would be possible for an astute trader to make unlimited amounts of money by exploiting the arbitrage opportunity. Since we don’t typically observe persistent arbitrage conditions, we can safely assum ...
... Interest Rate Parity Defined IRP is a “no arbitrage” condition. If IRP did not hold, then it would be possible for an astute trader to make unlimited amounts of money by exploiting the arbitrage opportunity. Since we don’t typically observe persistent arbitrage conditions, we can safely assum ...
Washington Consensus via IFIs - Law & Finance Institutional
... countries with balance of payment problems under older fixed rate currency exchange system Monitoring function only for countries in trouble under original system ...
... countries with balance of payment problems under older fixed rate currency exchange system Monitoring function only for countries in trouble under original system ...
the economics of the new phase of imperialism
... stability is assured, whether now or earlier, by ensuring inter alia that commodity prices do not rise inordinately in terms of it. This requires, first, that the domestic workers in the leading economy must not get "too strong" to precipitate a wage-price spiral on their own, and secondly, that pri ...
... stability is assured, whether now or earlier, by ensuring inter alia that commodity prices do not rise inordinately in terms of it. This requires, first, that the domestic workers in the leading economy must not get "too strong" to precipitate a wage-price spiral on their own, and secondly, that pri ...
1. The process of capital accumulation can be conceptually envisaged as... two distinct and alternative ways. I shall call the first...
... stability is assured, whether now or earlier, by ensuring inter alia that commodity prices do not rise inordinately in terms of it. This requires, first, that the domestic workers in the leading economy must not get "too strong" to precipitate a wage-price spiral on their own, and secondly, that pri ...
... stability is assured, whether now or earlier, by ensuring inter alia that commodity prices do not rise inordinately in terms of it. This requires, first, that the domestic workers in the leading economy must not get "too strong" to precipitate a wage-price spiral on their own, and secondly, that pri ...
The Long or Short of it: Determinants of Foreign Currency
... The role played by nominal exchange rate fluctuations in determining the payoffs to crossborder holdings and the pattern of international risk sharing has long been recognised in the literature (see, amongst others, Helpman and Razin 1982, Persson and Svensson 1989, Svensson 1989, Neumeyer 1998 and K ...
... The role played by nominal exchange rate fluctuations in determining the payoffs to crossborder holdings and the pattern of international risk sharing has long been recognised in the literature (see, amongst others, Helpman and Razin 1982, Persson and Svensson 1989, Svensson 1989, Neumeyer 1998 and K ...
PDF
... nominal interest rate. However, we emphasise our worries about short-term exchange rate volatility, which may increase the risk premium of forint denominated loans. In small foreign exchange markets, excessive exchange rate volatility may contribute to illiquid market conditions, typically character ...
... nominal interest rate. However, we emphasise our worries about short-term exchange rate volatility, which may increase the risk premium of forint denominated loans. In small foreign exchange markets, excessive exchange rate volatility may contribute to illiquid market conditions, typically character ...
Chapter 22
... Developing Country Borrowing and Debt Figure 22-3: Current Account Deficits and Real Currency Appreciation in Four Stabilizing Economies, 1976-1997 ...
... Developing Country Borrowing and Debt Figure 22-3: Current Account Deficits and Real Currency Appreciation in Four Stabilizing Economies, 1976-1997 ...
Twin Crises in Emerging Markets:
... increases, and as the devaluation is less expected by agents in the economy. We also show that devaluations are in general more contractionary when banks change their strategy (focus of their financial services) in the aftermath of crises. Our paper is also related to the literature that considers ...
... increases, and as the devaluation is less expected by agents in the economy. We also show that devaluations are in general more contractionary when banks change their strategy (focus of their financial services) in the aftermath of crises. Our paper is also related to the literature that considers ...
Eco 344
... • http://www.economist.com/blogs/dailychart/201 1/09/government-bonds/print • Bond price is negatively related to yield (interest rate) • The yield of Greek bond is highest, so the price of Greek bond is lowest. • US bond is still popular • Demand-and-supply diagram can be applied to the bond market ...
... • http://www.economist.com/blogs/dailychart/201 1/09/government-bonds/print • Bond price is negatively related to yield (interest rate) • The yield of Greek bond is highest, so the price of Greek bond is lowest. • US bond is still popular • Demand-and-supply diagram can be applied to the bond market ...
Chapter 11 – Pure Monopoly
... How does the wage rate (level) determined in a monopsony labor market compare to the rate (level) determined in a purely competitive labor market? How does the quantity of labor employed in a monopsony labor market compare to the quantity of labor employed in a purely competitive labor market? What ...
... How does the wage rate (level) determined in a monopsony labor market compare to the rate (level) determined in a purely competitive labor market? How does the quantity of labor employed in a monopsony labor market compare to the quantity of labor employed in a purely competitive labor market? What ...
NBER WORKING PAPER SERIES EXTERNAL ADJUSTMENT Maurice Obstfeld Working Paper
... A notable pre-1914 episode was the early-1890s U.S. dollar crisis sparked by the domestic agitation for silver. But by the interwar period, with the onset of the Great Depression and widespread banking instability, the situation became extreme. Countries losing gold (or gold-backed exchange) might b ...
... A notable pre-1914 episode was the early-1890s U.S. dollar crisis sparked by the domestic agitation for silver. But by the interwar period, with the onset of the Great Depression and widespread banking instability, the situation became extreme. Countries losing gold (or gold-backed exchange) might b ...
Financial Crisis in East Asia: A Macroeconomic Perspective
... available empirical evidence. Appreciation of Real Effective Exchange Rate The policy of pegged exchange rates in the face of relatively higher domestic inflation rates over a long period of time led to a significant appreciation of real exchange rates in East Asian countries. Our estimates of the e ...
... available empirical evidence. Appreciation of Real Effective Exchange Rate The policy of pegged exchange rates in the face of relatively higher domestic inflation rates over a long period of time led to a significant appreciation of real exchange rates in East Asian countries. Our estimates of the e ...
How do resource-driven economies cope with the oil price
... in foreign currency, which boosts these goods’ competitiveness. While the U.S. dollar value of imports is not affected, their domestic currency price increases, which makes them less affordable in the oil-exporting country and reduces demand for imports there. The value of remittances transferred by ...
... in foreign currency, which boosts these goods’ competitiveness. While the U.S. dollar value of imports is not affected, their domestic currency price increases, which makes them less affordable in the oil-exporting country and reduces demand for imports there. The value of remittances transferred by ...
On Decoupling and the China Connection
... (including commodity prices) BUT: producer currency pricing in EU but not in AS or RW implies real impact is felt first in EU and a delayed impact in AS and RW ...
... (including commodity prices) BUT: producer currency pricing in EU but not in AS or RW implies real impact is felt first in EU and a delayed impact in AS and RW ...
If You`re So Smart: John Maynard Keynes and Currency Speculation
... This paper provides a study of actual currency speculation during the 1920s and 1930s. Currency investing is often considered a zero sum activity in that one foreign exchange speculator’s gain is always another’s loss. Standard finance theory also holds that any profits from currency trading arise ...
... This paper provides a study of actual currency speculation during the 1920s and 1930s. Currency investing is often considered a zero sum activity in that one foreign exchange speculator’s gain is always another’s loss. Standard finance theory also holds that any profits from currency trading arise ...
Exogenous Macroeconomic Shocks and their Propagation in Bosnia
... There are several open questions if one considers the implementation of a VAR framework in a currency board regime. For instance, the first step in the process of implementation of the VAR framework is to identify monetary policy shocks. However, it is difficult to identify monetary policy shocks in ...
... There are several open questions if one considers the implementation of a VAR framework in a currency board regime. For instance, the first step in the process of implementation of the VAR framework is to identify monetary policy shocks. However, it is difficult to identify monetary policy shocks in ...
Monetary Policy and Economic Policy
... Monetary policy is the process by which the government, central bank, or monetary authority of a country controls the supply of money, availability of money, and cost of money or rate of interest to attain a set of objectives oriented towards the growth and stability of the economy.Monetary theory p ...
... Monetary policy is the process by which the government, central bank, or monetary authority of a country controls the supply of money, availability of money, and cost of money or rate of interest to attain a set of objectives oriented towards the growth and stability of the economy.Monetary theory p ...
Research and Monetary Policy Department Working Paper No:07/04
... the assessment of the effectiveness of monetary policy also requires considering the linkage between short-term policy rates and long-term yields. Aydın (2006) examines the sensitivity and speed of adjustment of credit interest rates to the monetary policy rate for corporate, housing, cash, and auto ...
... the assessment of the effectiveness of monetary policy also requires considering the linkage between short-term policy rates and long-term yields. Aydın (2006) examines the sensitivity and speed of adjustment of credit interest rates to the monetary policy rate for corporate, housing, cash, and auto ...
development of us banking
... Before World War I Many countries had governments that did not issue paper money. In these countries, paper currency meant only notes issued by large banks. In the United States, currency meant the money that the government printed. ...
... Before World War I Many countries had governments that did not issue paper money. In these countries, paper currency meant only notes issued by large banks. In the United States, currency meant the money that the government printed. ...
Harmonizing Money and Real Economy by a Universal Standard
... production of information flow to stabilize the otherwise unstable economic relations in the Keynesian general equilibrium model. The anticipated monetary supply causes a prolonged increase in price level as the spending plans accept the announced monetary effect on higher prices. Spending further f ...
... production of information flow to stabilize the otherwise unstable economic relations in the Keynesian general equilibrium model. The anticipated monetary supply causes a prolonged increase in price level as the spending plans accept the announced monetary effect on higher prices. Spending further f ...
NBER WORKING PAPER SERIES ARE DEVALUATIONS CONTRACTIONARY? Sebastian Edwards Working Paper No. 1676
... errors, however, are my own. Financial support from the National Science Foundation, Grant SES 84-19932, is gratefully acknowledged. The research reported here is part of the NBER's research program in International Studies. Any opinions expressed are those of the author and not those of the Nationa ...
... errors, however, are my own. Financial support from the National Science Foundation, Grant SES 84-19932, is gratefully acknowledged. The research reported here is part of the NBER's research program in International Studies. Any opinions expressed are those of the author and not those of the Nationa ...
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.