Spot Market
... Provides us with a benchmark for interpreting crossborder capital movements. Simple but quite useful - will be revisited later in ...
... Provides us with a benchmark for interpreting crossborder capital movements. Simple but quite useful - will be revisited later in ...
The Measurement of Co-Circulation of Currencies and Dollarization
... Former Soviet Union (FSU) countries since the early 90s when the command economy broke down and the newly established market economies became open to the outside world. High inflation and economic instability were present in Armenia in the early years of transition. The volume of foreign currency st ...
... Former Soviet Union (FSU) countries since the early 90s when the command economy broke down and the newly established market economies became open to the outside world. High inflation and economic instability were present in Armenia in the early years of transition. The volume of foreign currency st ...
Substitution between domestic and foreign currency loans in Central
... Slovakia. All these countries follow inflation targeting4 strategies and all have a substantial share of foreign currency loans in total loans to the private sector. Our study is not the first approach to credit expansion in Central and Eastern Europe. The investigated topics include e.g. estimating ...
... Slovakia. All these countries follow inflation targeting4 strategies and all have a substantial share of foreign currency loans in total loans to the private sector. Our study is not the first approach to credit expansion in Central and Eastern Europe. The investigated topics include e.g. estimating ...
Maurice Obstfeld Working
... intertemporally solvent governments could face international liquidity constraints. Wage-price inflexibility implied that countries suffering from simultaneous reserve loss and unemployment might need to undergo lengthy transitions before returning to balance. By the 1960s, when trade had been subst ...
... intertemporally solvent governments could face international liquidity constraints. Wage-price inflexibility implied that countries suffering from simultaneous reserve loss and unemployment might need to undergo lengthy transitions before returning to balance. By the 1960s, when trade had been subst ...
Models of Economic and Financial Crises
... specific index of vulnerability exceeds an arbitrarily chosen threshold. For example, for currency crises, the index of vulnerability is sometimes based on a weighted average of percentage changes in nominal exchange rates, gross international reserves and short-term interest rate differentials (e.g ...
... specific index of vulnerability exceeds an arbitrarily chosen threshold. For example, for currency crises, the index of vulnerability is sometimes based on a weighted average of percentage changes in nominal exchange rates, gross international reserves and short-term interest rate differentials (e.g ...
Internal balance External balance
... maintaining internal balance was mixed. – Example: The U.S. unemployment rate averaged 6.8% between 1890 and 1913, but it averaged under 5.7% between 1946 and 1992. ...
... maintaining internal balance was mixed. – Example: The U.S. unemployment rate averaged 6.8% between 1890 and 1913, but it averaged under 5.7% between 1946 and 1992. ...
Exchange Rates and Purchasing Power Parity
... Exchange rates matter in many different ways to many different constituencies in the world economy Much of this section on international finance will be directly or indirectly concerned with exchange rates ...
... Exchange rates matter in many different ways to many different constituencies in the world economy Much of this section on international finance will be directly or indirectly concerned with exchange rates ...
Legal and Institutional Aspects of the International Monetary System
... procedures, had to adjust to the new system and the simplicity of the rule of law prescribing the par value standard. The book demonstrates that a complete description of the three elements (the international monetary system, the IMF, and international monetary law) is like analyzing three Boulian l ...
... procedures, had to adjust to the new system and the simplicity of the rule of law prescribing the par value standard. The book demonstrates that a complete description of the three elements (the international monetary system, the IMF, and international monetary law) is like analyzing three Boulian l ...
The Flexible Model, Gold Dinar and Exchange Rate Determination
... used to buy other goods. It must also act as store of value for it could be used to trade current goods for future goods and it also could be measured as a unit of account. Money that could fulfill all the three roles is categorized as good money. The problem with the existing money that in our mone ...
... used to buy other goods. It must also act as store of value for it could be used to trade current goods for future goods and it also could be measured as a unit of account. Money that could fulfill all the three roles is categorized as good money. The problem with the existing money that in our mone ...
Foreign exchange markets` seasonal effects in the
... towards foreign exchange markets.6 Such asymmetry of interest may not be justified in terms of scarcity of available data, investors’ interest or lack of theoretical ground. In fact, high frequency foreign exchange quotes for the most traded currencies are readily available, from multiple credible s ...
... towards foreign exchange markets.6 Such asymmetry of interest may not be justified in terms of scarcity of available data, investors’ interest or lack of theoretical ground. In fact, high frequency foreign exchange quotes for the most traded currencies are readily available, from multiple credible s ...
Understanding the financial crisis in Asia Bhagwan Chowdhry , Amit Goyal
... that successfully defended its currency against speculative attacks and has maintained its parity with the U.S. dollar. The stock markets in all these countries in Asia plunged as the currency crisis engulfed most of East Asian countries.4 One of the biggest challenges facing scholars studying the E ...
... that successfully defended its currency against speculative attacks and has maintained its parity with the U.S. dollar. The stock markets in all these countries in Asia plunged as the currency crisis engulfed most of East Asian countries.4 One of the biggest challenges facing scholars studying the E ...
(fixed exchange rate system). - College of Business Administration
... inflation rates in different nations results in BOP pressures (deficit in more inflationary nations and surplus in less inflationary nations) that restrain each nation from achieving its optimum inflation-unemployment trade-off. ...
... inflation rates in different nations results in BOP pressures (deficit in more inflationary nations and surplus in less inflationary nations) that restrain each nation from achieving its optimum inflation-unemployment trade-off. ...
ECN 4861 Word Document (Fall 2001)
... The value left by the summation of the Current + Capital accounts and the Statistical Discrepency This value implies the change in the level of official (Central Bank) reserves [<0 implies central bank reserve depletion, >0 implies central bank reserve accumulation] Other Common Accounts: "The Trade ...
... The value left by the summation of the Current + Capital accounts and the Statistical Discrepency This value implies the change in the level of official (Central Bank) reserves [<0 implies central bank reserve depletion, >0 implies central bank reserve accumulation] Other Common Accounts: "The Trade ...
in Stanley Fischer of Working Paper No. 936
... conditions (8)—(11)'. In a full perfect foresight equilibrium, the rate of consumption and the resulting rates of inflation and interest will be consistent with the expectations under which the consumption path was chosen. It is well known that convergence of such paths in a monetary economy is a di ...
... conditions (8)—(11)'. In a full perfect foresight equilibrium, the rate of consumption and the resulting rates of inflation and interest will be consistent with the expectations under which the consumption path was chosen. It is well known that convergence of such paths in a monetary economy is a di ...
Exchange rate overshooting and the costs of floating
... analytical framework that explains the overshooting phenomenon and can be used to evaluate the costs of a currency crisis in a country with a high level of foreign currency debt. The key mechanism of the model is the presence of a margin constraint (as in Aiyagari and Gertler, 1999) imposed on the ...
... analytical framework that explains the overshooting phenomenon and can be used to evaluate the costs of a currency crisis in a country with a high level of foreign currency debt. The key mechanism of the model is the presence of a margin constraint (as in Aiyagari and Gertler, 1999) imposed on the ...
The costs and benefits of Economic and Monetary - Euro-know
... based on pure sentiment rather than fundamentals; the best-managed country can have its exchange rate ‘attacked by speculators’ in such a bubble and this, it is argued, will generally be triggered by world events in a contagious way so that their possibility cannot easily be diversified against. By ...
... based on pure sentiment rather than fundamentals; the best-managed country can have its exchange rate ‘attacked by speculators’ in such a bubble and this, it is argued, will generally be triggered by world events in a contagious way so that their possibility cannot easily be diversified against. By ...
Test 2 - Department of Economics
... To achieve both internal and external balance simultaneously, the government should implement a combination of expansionary monetary/fiscal policy (to achieve internal balance) together with a policy that would eliminate the deficit in the trade account (e.g., imposition of tariffs). Let’s analyze t ...
... To achieve both internal and external balance simultaneously, the government should implement a combination of expansionary monetary/fiscal policy (to achieve internal balance) together with a policy that would eliminate the deficit in the trade account (e.g., imposition of tariffs). Let’s analyze t ...
Emerging Market Corporate Debt: An Attractive Investment Opportunity
... these currencies, the issuers in these countries typically gain from weaker currencies thus providing a natural credit hedge. Twenty one percent of the issuers are in China which has a managed currency regime and 7% are in Hong Kong which has pegged its currency to USD. The central banks in these tw ...
... these currencies, the issuers in these countries typically gain from weaker currencies thus providing a natural credit hedge. Twenty one percent of the issuers are in China which has a managed currency regime and 7% are in Hong Kong which has pegged its currency to USD. The central banks in these tw ...
8.1 Elasticities Approach
... foreign exchange market, then economists say that its interventions are leaning with the wind. In contrast, a central bank’s interventions intended to halt or reverse a recent trend in the value of its country’s currency are leaning against the wind. ...
... foreign exchange market, then economists say that its interventions are leaning with the wind. In contrast, a central bank’s interventions intended to halt or reverse a recent trend in the value of its country’s currency are leaning against the wind. ...
Monetary Policy in Vietnam: Alternatives to Inflation Targeting
... holdings and replace them with gold, rice and US dollar assets. This drove up the black market price of gold and US dollars 16 . Continued efforts by households and other economic agents to protect themselves from inflation by getting rid of their domestic currency holdings (causing the ratio of cur ...
... holdings and replace them with gold, rice and US dollar assets. This drove up the black market price of gold and US dollars 16 . Continued efforts by households and other economic agents to protect themselves from inflation by getting rid of their domestic currency holdings (causing the ratio of cur ...
Document
... A real depreciation of the home currency raises aggregate demand for home output, other things equal; a real appreciation lowers aggregate demand for home output. A rise in domestic real income raises aggregate demand for home output, other things equal, and a fall in domestic real ...
... A real depreciation of the home currency raises aggregate demand for home output, other things equal; a real appreciation lowers aggregate demand for home output. A rise in domestic real income raises aggregate demand for home output, other things equal, and a fall in domestic real ...
PDF Download
... euro. Like ERM I, ERM II is also a multilateral exchange rate arrangement with a fixed, but adjustable, central parity and a fluctuation band around it. Countries participating in ERM II peg their exchange rates to the euro, allowing for fluctuations within a symmetric band of 15 percent on each sid ...
... euro. Like ERM I, ERM II is also a multilateral exchange rate arrangement with a fixed, but adjustable, central parity and a fluctuation band around it. Countries participating in ERM II peg their exchange rates to the euro, allowing for fluctuations within a symmetric band of 15 percent on each sid ...
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.