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... production and welfare in the U.S. forest products sector. This paper uses a dynamic global timber market model developed by Sohngen et al. (1999) to explore the effects of several alternative exchange rate scenarios on the domestic industry. The model maximizes the net present value of consumers' p ...
... production and welfare in the U.S. forest products sector. This paper uses a dynamic global timber market model developed by Sohngen et al. (1999) to explore the effects of several alternative exchange rate scenarios on the domestic industry. The model maximizes the net present value of consumers' p ...
1. Prices and Inflation
... Economic reforms, in their final implications, gradually suppressed the former property and income equalization and accelerated the growth of inequality in the society. This process has two dimensions. The first is a higher number of households living in poverty, which is caused by income polarizati ...
... Economic reforms, in their final implications, gradually suppressed the former property and income equalization and accelerated the growth of inequality in the society. This process has two dimensions. The first is a higher number of households living in poverty, which is caused by income polarizati ...
7.4 Asset Market Approach
... Monetary Approach Sticky-Price Monetary Approach Portfolio Approach ...
... Monetary Approach Sticky-Price Monetary Approach Portfolio Approach ...
Open Economy Macroeconomics 26
... 1. There is an oversupply of dollars on the worldwide market. What happens to the exchange rate between the United States and Britain? 2. Inflation heats up in Britain. What happens to the exchange rate between the United States and Britain? 3. Disposable income rises in the United States because of ...
... 1. There is an oversupply of dollars on the worldwide market. What happens to the exchange rate between the United States and Britain? 2. Inflation heats up in Britain. What happens to the exchange rate between the United States and Britain? 3. Disposable income rises in the United States because of ...
An Institutional Framework for Comparing Emerging Market
... down and reduce the cost of stabilization. Either way, fundamental disequilibria will need to be addressed at the very outset.7 The paper starts by discussing the motivating factors for adopting a CBA and the prerequisites for its effective functioning. It assesses the merits and drawbacks of this p ...
... down and reduce the cost of stabilization. Either way, fundamental disequilibria will need to be addressed at the very outset.7 The paper starts by discussing the motivating factors for adopting a CBA and the prerequisites for its effective functioning. It assesses the merits and drawbacks of this p ...
Dollarization: A Primer - The Centre for Economic Performance
... Recent turmoil in financial markets has revealed the inherent vulnerability of intermediate exchange rate regimes and conventional pegs to sudden aggregate shocks in a context of rapidly growing global financial integration. As a result, an incresing number of economists and policymakers has endorse ...
... Recent turmoil in financial markets has revealed the inherent vulnerability of intermediate exchange rate regimes and conventional pegs to sudden aggregate shocks in a context of rapidly growing global financial integration. As a result, an incresing number of economists and policymakers has endorse ...
Chapter 14: Exchange Rates and Purchasing Power Parity.
... The PPP is useful to get a sense of the long-term tendency towards which nominal exchange rates move absent other changes ...
... The PPP is useful to get a sense of the long-term tendency towards which nominal exchange rates move absent other changes ...
... This essay is based on the Frank D. Graham Memorial Lecture for 1997-98, which I had the honor of presenting at Princeton University on April 9, 1998. Frank Graham was deeply concerned with the interplay among national policy sovereignty, exchange rate regimes, and pricelevel stability. At present ...
Chapter 1 International Financial Markets: Basic Concepts
... the attention of investors worldwide. Net long-term private flows to developing countries increased from $42 billion in 1990 to $256 billion in 1997. This time the largest share of ...
... the attention of investors worldwide. Net long-term private flows to developing countries increased from $42 billion in 1990 to $256 billion in 1997. This time the largest share of ...
Effects of U.S. Quantitative Easing on Latin American Economies
... There has been widespread concern among policymakers in emerging economies about the effects of quantitative easing (QE) policies implemented in developed economies. This comes from the fact that these measures have triggered large surges in capital inflows to emerging countries, leading to exchange ...
... There has been widespread concern among policymakers in emerging economies about the effects of quantitative easing (QE) policies implemented in developed economies. This comes from the fact that these measures have triggered large surges in capital inflows to emerging countries, leading to exchange ...
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... leads to a sharp devaluation of a currency. But sometimes monetary institutions try to avoid these devaluations. They intervene to avoid or soften the devaluation. Although no sharp devaluation occurred in these cases, they are also currency crises because the authorities were forced to intervene. S ...
... leads to a sharp devaluation of a currency. But sometimes monetary institutions try to avoid these devaluations. They intervene to avoid or soften the devaluation. Although no sharp devaluation occurred in these cases, they are also currency crises because the authorities were forced to intervene. S ...
NBER WORKING PAPER SERIES ON THE RENMINBI: THE CHOICE BETWEEN ADJUSTMENT
... An exchange rate that is de facto fixed has served China well over the last eight years. Nevertheless, four major reasons have been given to suggest that it may now be time to allow the yuan to appreciate. First, calculations based on the Balassa-Samuelson relationship suggest that the real value of ...
... An exchange rate that is de facto fixed has served China well over the last eight years. Nevertheless, four major reasons have been given to suggest that it may now be time to allow the yuan to appreciate. First, calculations based on the Balassa-Samuelson relationship suggest that the real value of ...
Effects of Fiscal Policy under Different Capital Mobility
... interest rate i and real GDP Y that are consistent with equilibrium in the money sector of the national economy, given the state of other fundamental influences. If any of these other fundamental influences changes, then the entire LM curve changes. Factors that will shift the LM curve include: (1) ...
... interest rate i and real GDP Y that are consistent with equilibrium in the money sector of the national economy, given the state of other fundamental influences. If any of these other fundamental influences changes, then the entire LM curve changes. Factors that will shift the LM curve include: (1) ...
The Sequence of Capital Account Liberalization: a Microcosmic Model
... H4: The government can observe the macroeconomic fundamentals a and the quantity S exchanged by the foreign exchange short seller. Here, a is a summary statistic of every macroeconomic variable that has been known to help the government defend its currency, such as current account surpluses, foreign ...
... H4: The government can observe the macroeconomic fundamentals a and the quantity S exchanged by the foreign exchange short seller. Here, a is a summary statistic of every macroeconomic variable that has been known to help the government defend its currency, such as current account surpluses, foreign ...
This PDF is a selection from an out-of-print volume from the... of Economic Research
... the CPI, the value-added price index, and the nominal gross national product. They find that the relative ranking of these rules will depend on the relative elasticities of labor demand and supply. Aizenman and Frenkel then establish that under flexible exchange rates, there is a dual relationship b ...
... the CPI, the value-added price index, and the nominal gross national product. They find that the relative ranking of these rules will depend on the relative elasticities of labor demand and supply. Aizenman and Frenkel then establish that under flexible exchange rates, there is a dual relationship b ...
Financial Flows and Open Economy Macroeconomics Prabhat Patnaik
... II Once the economy gets exposed to free financial flows, the government ceases to have control over its interest rate, since the real interest rate in this economy would now have to be as attractive as that prevailing internationally. The only possible reason for its being out of line with what pre ...
... II Once the economy gets exposed to free financial flows, the government ceases to have control over its interest rate, since the real interest rate in this economy would now have to be as attractive as that prevailing internationally. The only possible reason for its being out of line with what pre ...
Talk: Exchange Rates
... The Problems of Flexible Exchange Rates The exchange rate can move for many other reasons than changes in the domestic interest rate. Expectations play a large role in the determination of the exchange rate. Flexible exchange rate may be subject to large fluctuations which, in turn, require large m ...
... The Problems of Flexible Exchange Rates The exchange rate can move for many other reasons than changes in the domestic interest rate. Expectations play a large role in the determination of the exchange rate. Flexible exchange rate may be subject to large fluctuations which, in turn, require large m ...
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.