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... 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 ...
Briefing Notes in Economics – Issue No. 69, June/July 2006 Kamal
... results of our third equation are reported in Table 3. Although the estimations of our third equation seem fine in terms of the goodness of fit and the estimated Fvalues, the signs of the explanatory variables are not consistent across the G7 countries. The coefficient of the domestic money supply c ...
... results of our third equation are reported in Table 3. Although the estimations of our third equation seem fine in terms of the goodness of fit and the estimated Fvalues, the signs of the explanatory variables are not consistent across the G7 countries. The coefficient of the domestic money supply c ...
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... US workers can lose their competitiveness when firms build state-of-the-art factories in low-wage countries, making them as productive as plants in the US ...
... US workers can lose their competitiveness when firms build state-of-the-art factories in low-wage countries, making them as productive as plants in the US ...
Political Economy in Macroeconomics
... depreciation. The real exchange rate implications of high inflation thus change the governments' incentives to inflate. One interesting aspect of the analysis is that it gives a specific real-world structure to the question of institutional commitment first raised in Chapter 5. The specific structur ...
... depreciation. The real exchange rate implications of high inflation thus change the governments' incentives to inflate. One interesting aspect of the analysis is that it gives a specific real-world structure to the question of institutional commitment first raised in Chapter 5. The specific structur ...
EURO ADOPTION AND EXPORT: A CASE STUDY OF THE CZECH
... sales abroad at the peak of the crisis. At first glance, the difference could be explained by a too strong exchange rate caused by the devaluation of neighbouring currencies. However, the pillars of the Slovak economy, such as automotive and electro-technical industries, are strongly oriented toward ...
... sales abroad at the peak of the crisis. At first glance, the difference could be explained by a too strong exchange rate caused by the devaluation of neighbouring currencies. However, the pillars of the Slovak economy, such as automotive and electro-technical industries, are strongly oriented toward ...
East Asia: Success and Crisis
... 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 ...
Mervyn King: Reform of the International Monetary Fund
... rest of the G-7. So the Fund urgently needs to ask what its main purpose is. In 1944, when the Bretton Woods system was created, it was understood that sharp changes in capital flows were costly. Changes in capital flows can induce changes in trade flows. And to bring about large changes in trade fl ...
... rest of the G-7. So the Fund urgently needs to ask what its main purpose is. In 1944, when the Bretton Woods system was created, it was understood that sharp changes in capital flows were costly. Changes in capital flows can induce changes in trade flows. And to bring about large changes in trade fl ...
Foreign currencies - Brochure
... can have a major impact on Swiss companies that export or import. For example: Let’s say your product costs 9,000 Swiss francs to make. The sales price is 10,000 francs, so the margin is 1,000 francs. You get an order from the USA and invoice your delivery at the current rate of 1 Swiss franc to the ...
... can have a major impact on Swiss companies that export or import. For example: Let’s say your product costs 9,000 Swiss francs to make. The sales price is 10,000 francs, so the margin is 1,000 francs. You get an order from the USA and invoice your delivery at the current rate of 1 Swiss franc to the ...
Slides - Centre for Economic Policy Research
... States was invalidated by the Gold Reserve Act of 1934. Congress later reinstated their use for obligations (new contracts) issued after October 1977 in accordance with 31 U.S.C. § 5118(d)(2).[1] • On August 27, 2008, the United States Court of Appeals for the Sixth Circuit affirmed the enforceabili ...
... States was invalidated by the Gold Reserve Act of 1934. Congress later reinstated their use for obligations (new contracts) issued after October 1977 in accordance with 31 U.S.C. § 5118(d)(2).[1] • On August 27, 2008, the United States Court of Appeals for the Sixth Circuit affirmed the enforceabili ...
A Macroeconomic Theory of the Open Economy
... problems on the international economy. Our trade deficit is not caused by other countries’ “unfair” trade practices, but by our own low saving. Stagnant living standards are not caused by imports, but by low productivity growth. ...
... problems on the international economy. Our trade deficit is not caused by other countries’ “unfair” trade practices, but by our own low saving. Stagnant living standards are not caused by imports, but by low productivity growth. ...
In Order to Form a More Perfect Monetary Union
... of credit. But although this prohibition was considered, it was not enacted. A second cause for doubt is that during the Confederation period, states that had issued paper money (for instance, Pennsylvania) experienced deflations as large as the wartime inflation. Also unanswered are the questions o ...
... of credit. But although this prohibition was considered, it was not enacted. A second cause for doubt is that during the Confederation period, states that had issued paper money (for instance, Pennsylvania) experienced deflations as large as the wartime inflation. Also unanswered are the questions o ...
overshooting exchange rates
... countries can pursue independent monetary policy. This advantage is reduced if there is an international demand for currencies. • Currency substitution deals with the substitutability of currencies on the demand side of the market. • So long as people believe that the exchange value between two curr ...
... countries can pursue independent monetary policy. This advantage is reduced if there is an international demand for currencies. • Currency substitution deals with the substitutability of currencies on the demand side of the market. • So long as people believe that the exchange value between two curr ...
Chapter 8
... able to achieve without derivatives, or could achieve only at greater cost – Hedge risks that otherwise would not be possible to hedge – Make underlying markets more efficient (price discovery) – Reduce volatility of stock returns (by writing call options on stocks you own) – Minimize earnings volat ...
... able to achieve without derivatives, or could achieve only at greater cost – Hedge risks that otherwise would not be possible to hedge – Make underlying markets more efficient (price discovery) – Reduce volatility of stock returns (by writing call options on stocks you own) – Minimize earnings volat ...
A review of the trade weighted exchange rate index Hannah Kite
... within other countries’ domestic economies, and hence ...
... within other countries’ domestic economies, and hence ...
NBER WORKING PAPER SERIES THE MIRAGE OF EXCHANGE RATE Guillermo A. Calvo
... would likely lead to a collapse of the financial system. Also a frail banking system can produce fiscal instability, and hence high inflation and devaluations, because the need for a bailout can imply a huge unfunded government liability (Burnside, Eichengreen and Rebelo, 2001). Weak monetary instit ...
... would likely lead to a collapse of the financial system. Also a frail banking system can produce fiscal instability, and hence high inflation and devaluations, because the need for a bailout can imply a huge unfunded government liability (Burnside, Eichengreen and Rebelo, 2001). Weak monetary instit ...
The Thirty-Five Most Tumultuous Years in Monetary History
... increased, and the countries developed increasingly large trade deficits. The inference from the national income accounting identity is that their domestic economies adjusted to the increases in the inflow of foreign saving by some combination of an increase in domestic investment, a decline in dome ...
... increased, and the countries developed increasingly large trade deficits. The inference from the national income accounting identity is that their domestic economies adjusted to the increases in the inflow of foreign saving by some combination of an increase in domestic investment, a decline in dome ...
NBER WORKING PAPER SERIES AREAS Pierre-Richard Agenor
... of two monetary arrangements: a system of independent national currencies and a single currency area. They find that the presence of country-specific shocks may either reduce or enhance the benefits of a single currency area, depending on the importance of exchange rate adjustment relative to risksh ...
... of two monetary arrangements: a system of independent national currencies and a single currency area. They find that the presence of country-specific shocks may either reduce or enhance the benefits of a single currency area, depending on the importance of exchange rate adjustment relative to risksh ...
Estimating the Size of the Hidden Economy in Peru: A Currency
... The data used for the analysis is quarterly and covers the period 1979:2 through 2005:2, with the aim of having a sufficiently broad sample period which is usual under this approach.11 As shown in Figure A.1 in Appendix 1, the currency held by the public in Peru (hereinafter currency) has behaved so ...
... The data used for the analysis is quarterly and covers the period 1979:2 through 2005:2, with the aim of having a sufficiently broad sample period which is usual under this approach.11 As shown in Figure A.1 in Appendix 1, the currency held by the public in Peru (hereinafter currency) has behaved so ...
Jose De Gregorio--Resilience in Latin America Final IMF-WP
... be contractionary, not because of bad judgment, but because there was no space to expand fiscal policy. Creditworthiness deteriorated during periods of bad external conditions and the ability to finance the budget was severely impaired. Therefore, liquidity constraints became binding, forcing a fisc ...
... be contractionary, not because of bad judgment, but because there was no space to expand fiscal policy. Creditworthiness deteriorated during periods of bad external conditions and the ability to finance the budget was severely impaired. Therefore, liquidity constraints became binding, forcing a fisc ...
January`s currency movements will probably not be
... greenback. As is the case for many other currencies, this trend is largely due to expectations of divergence in monetary policies. Monetary policies will increasingly diverge For a few years now we have been talking about divergence between U.S. monetary policy and those of many other economies. The ...
... greenback. As is the case for many other currencies, this trend is largely due to expectations of divergence in monetary policies. Monetary policies will increasingly diverge For a few years now we have been talking about divergence between U.S. monetary policy and those of many other economies. The ...
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.