National Asset-Liability Management Europe Symposium
... Impossible trinity (also known as the Trilemma) on monetary policy dependence as monetary conditions have become more correlated than before. Resilience of Emerging Market Economies to Global Financial Conditions In the 1980s and 1990s EMEs experienced financial crises following a sudden reversal of ...
... Impossible trinity (also known as the Trilemma) on monetary policy dependence as monetary conditions have become more correlated than before. Resilience of Emerging Market Economies to Global Financial Conditions In the 1980s and 1990s EMEs experienced financial crises following a sudden reversal of ...
Foreign Exchange Risk
... • The forward market is the market for the future delivery of a currency. • Typical maturity is 1,3,6, 9 and 12 months. • The forward rate is determined by market participants’ expectations of the future spot value of the currency which, in turn, depends on other ...
... • The forward market is the market for the future delivery of a currency. • Typical maturity is 1,3,6, 9 and 12 months. • The forward rate is determined by market participants’ expectations of the future spot value of the currency which, in turn, depends on other ...
foreign currency option
... • A foreign currency futures contract is an exchangetraded agreement calling for future delivery of a standard amount of foreign currency at a fixed time, place and price • Foreign currency futures contracts are in reality standardized forward contracts. Unlike forward contracts, however, trading oc ...
... • A foreign currency futures contract is an exchangetraded agreement calling for future delivery of a standard amount of foreign currency at a fixed time, place and price • Foreign currency futures contracts are in reality standardized forward contracts. Unlike forward contracts, however, trading oc ...
Price Adjustments and Balance-of
... gold standard is triggered by changes in the money supply related to flows of gold. This adjustment depends on flexible wages and prices – any rigidities will hinder adjustment. Other adjustment may occur due the effects of changes in the money supply on interest rates and income. The gold sta ...
... gold standard is triggered by changes in the money supply related to flows of gold. This adjustment depends on flexible wages and prices – any rigidities will hinder adjustment. Other adjustment may occur due the effects of changes in the money supply on interest rates and income. The gold sta ...
NBER WORKING PAPER SERIES A CURRENCY OF ONE’S OWN?
... nations. From a policy perspective, however, it is important to make a distinction between these two common currency regimes. The reason for this is that the two regimes have important differences in terms of independence of monetary policy, seignorage, and capacity to absorb external shocks. Making ...
... nations. From a policy perspective, however, it is important to make a distinction between these two common currency regimes. The reason for this is that the two regimes have important differences in terms of independence of monetary policy, seignorage, and capacity to absorb external shocks. Making ...
CURRENCY BOARDS Steve H. Hanke and Kurt Schuler
... exchange, and unit of account. An unsound currency such as the ruble does not fulfill any of those functions. An unsound currency is not a reliable store of value because inflation makes its value highly unpredictable. As a result, people save by hoarding bricks, timbers, food, and other commodities ...
... exchange, and unit of account. An unsound currency such as the ruble does not fulfill any of those functions. An unsound currency is not a reliable store of value because inflation makes its value highly unpredictable. As a result, people save by hoarding bricks, timbers, food, and other commodities ...
PDF Download
... more advanced nature. For example, this phase is characterised by reform of the agricultural sector, the dismantling of conglomerates in heavy industry, the fostering of SMEs and the development of service industries. The objective of these reforms is to prepare the economy to cope with the competit ...
... more advanced nature. For example, this phase is characterised by reform of the agricultural sector, the dismantling of conglomerates in heavy industry, the fostering of SMEs and the development of service industries. The objective of these reforms is to prepare the economy to cope with the competit ...
Slide 1
... • Purchasing-power parity is a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries. • According to the purchasing-power parity theory, a unit of any given currency should be able to buy the same quantity of goods in all coun ...
... • Purchasing-power parity is a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries. • According to the purchasing-power parity theory, a unit of any given currency should be able to buy the same quantity of goods in all coun ...
Convergence and shocks in the road to EU: Empirical investigations
... The basic ideas of the Monetarist approach ...
... The basic ideas of the Monetarist approach ...
Lecture 3
... floating exchange rates by combining the models we have developed with additional theory and evidence. • We begin with an application about Germany and Britain in the early 1990s. • This story highlights the choices policy makers face as they choose between fixed exchange rates (pegs) and floating e ...
... floating exchange rates by combining the models we have developed with additional theory and evidence. • We begin with an application about Germany and Britain in the early 1990s. • This story highlights the choices policy makers face as they choose between fixed exchange rates (pegs) and floating e ...
STUDY GUIDE FINAL ECO41 FALL 2011 UDAYAN ROY The final
... Which of the following is accurate? a. As the left panel of the figure above shows, an increase in the supply of money reduces the interest rate, provided the price level and the real GNP are unchanged. b. As the right panel of the figure above shows, an increase in the supply of money raises the in ...
... Which of the following is accurate? a. As the left panel of the figure above shows, an increase in the supply of money reduces the interest rate, provided the price level and the real GNP are unchanged. b. As the right panel of the figure above shows, an increase in the supply of money raises the in ...
Balance of Payments and Exchange Rates
... • With more than one good, the meaning will be slightly different. We will need to use the aggregate price of a basket of goods (the price level or CPI) in each country and the RER will become the relative price of the 2 baskets. Ch1/BP&ER ...
... • With more than one good, the meaning will be slightly different. We will need to use the aggregate price of a basket of goods (the price level or CPI) in each country and the RER will become the relative price of the 2 baskets. Ch1/BP&ER ...
the yen depreciation and its implications for east and southeast asia
... down GDP growth by less than 0.2 percentage points. Even so, the main competitive edge that Republic of Korea products have against often qualitatively superior Japanese products is price. And any reduction in Koreas trade surplus would reduce the liquidity available to that countrys financial mar ...
... down GDP growth by less than 0.2 percentage points. Even so, the main competitive edge that Republic of Korea products have against often qualitatively superior Japanese products is price. And any reduction in Koreas trade surplus would reduce the liquidity available to that countrys financial mar ...
1 Apropos of Everything
... and assets. Thus, the US dollar was firmly established as the world’s only reserve currency and its hegemony was unchallenged. In 1944 in Bretton Woods, New Hampshire, the US and the UK framed a new monetary order intended to govern commerci ...
... and assets. Thus, the US dollar was firmly established as the world’s only reserve currency and its hegemony was unchallenged. In 1944 in Bretton Woods, New Hampshire, the US and the UK framed a new monetary order intended to govern commerci ...
Macroeconomic Issues and Vulnerabilities in the Global
... some corporates); and then during the crisis by a surge in public debt and deficits • History and theory suggests that recovery from balance sheet crises is anemic for up to a decade: you need to spend less and save more (dissave less) to reduce debt and leverage over time. Thus, an anemic recovery. ...
... some corporates); and then during the crisis by a surge in public debt and deficits • History and theory suggests that recovery from balance sheet crises is anemic for up to a decade: you need to spend less and save more (dissave less) to reduce debt and leverage over time. Thus, an anemic recovery. ...
Key Development at a Glance - Claremont Graduate University
... ---Globalization accelerates the adjustment of industries which results in the increase of manufacturing trading. ---Limitations of techniques from developed countries. ---Unfairness in international system. B.From domestic side ---high ratio of savings/investment ---large surplus of capital owing t ...
... ---Globalization accelerates the adjustment of industries which results in the increase of manufacturing trading. ---Limitations of techniques from developed countries. ---Unfairness in international system. B.From domestic side ---high ratio of savings/investment ---large surplus of capital owing t ...
Does Internationalizing the RMB Make Sense for China?
... current international monetary system, which he argued is too reliant on holding sovereign currency reserves (i.e., the U.S. dollar). He urged expanding use of the IMF’s Special Drawing Rights and proposed a stronger international role for the RMB in the valuation of SDR. Zhou’s call to reform the i ...
... current international monetary system, which he argued is too reliant on holding sovereign currency reserves (i.e., the U.S. dollar). He urged expanding use of the IMF’s Special Drawing Rights and proposed a stronger international role for the RMB in the valuation of SDR. Zhou’s call to reform the i ...
Alternative Interpretations of a Stateless Currency
... report) ‘as a leaven for the evolvement of a political union which in the long run it will in any case be unable to do without’. For if the creation of a monetary union and Community control over national budgets generates pressures which lead to a breakdown of the whole system it will prevent the d ...
... report) ‘as a leaven for the evolvement of a political union which in the long run it will in any case be unable to do without’. For if the creation of a monetary union and Community control over national budgets generates pressures which lead to a breakdown of the whole system it will prevent the d ...
A Currency Union Or An Exchange Rate Union
... China. It is unlikely that Hong Kong would join a currency area without co-ordination with the central government of China. It is less likely that all the East Asian countries can form a common currency area in a reasonably short time period. China, Japan, Korea and Taiwan are important economies in ...
... China. It is unlikely that Hong Kong would join a currency area without co-ordination with the central government of China. It is less likely that all the East Asian countries can form a common currency area in a reasonably short time period. China, Japan, Korea and Taiwan are important economies in ...
View/Open
... countries net saving balance, parallels growth in the U.S. CA deficit. Globally, the net savings balance must sum to zero so that one country's CA surplus must be others' CA deficit. This constraint suggests that countries such as China cannot continue indefinitely to rely on foreign demand to susta ...
... countries net saving balance, parallels growth in the U.S. CA deficit. Globally, the net savings balance must sum to zero so that one country's CA surplus must be others' CA deficit. This constraint suggests that countries such as China cannot continue indefinitely to rely on foreign demand to susta ...
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.