Exchange rate, output and employment: revisiting the contractionary devaluation hypothesis Saúl Keifman
... typical instruments of the second kind of policies. An increase in the exchange rate (a currency devaluation) should improve the trade balance as long as the Marshall-Lerner conditions held. 3 In turn, if these conditions held, devaluation would have an expansionary effect on output and employment w ...
... typical instruments of the second kind of policies. An increase in the exchange rate (a currency devaluation) should improve the trade balance as long as the Marshall-Lerner conditions held. 3 In turn, if these conditions held, devaluation would have an expansionary effect on output and employment w ...
chinese mercantilism: currency wars and how the east was
... suggests that the economic house is still divided. Operation of a managed exchange rate, is, after all, a form of capital control. A legitimate question arises if controls were a major part of the problem, how can they now be a significant part of the solution? The earliest commentators (Bergsten (1 ...
... suggests that the economic house is still divided. Operation of a managed exchange rate, is, after all, a form of capital control. A legitimate question arises if controls were a major part of the problem, how can they now be a significant part of the solution? The earliest commentators (Bergsten (1 ...
NBER WORKING PAPER SERIES MANAGING CURRENCY PEGS Stephanie Schmitt-Grohé Martín Uribe
... for a devaluation whenever the real wage consistent with full employment in any period t falls below γWt−1 /Et−1 . Figure 5 illustrates how the optimal devaluation rate ensures full employment at all times. As explained earlier, in the absence of a devaluation, the increase in the interest rate push ...
... for a devaluation whenever the real wage consistent with full employment in any period t falls below γWt−1 /Et−1 . Figure 5 illustrates how the optimal devaluation rate ensures full employment at all times. As explained earlier, in the absence of a devaluation, the increase in the interest rate push ...
Monetary Response of China, South Korea, and Singapore to the
... macroeconomic fundamentals, reduced exposure to external vulnerabilities, and rather robust balance sheets of financial institutions supported the belief that Asia would successfully avoid economic recession. This view was also backed up by the fact that banking systems of most countries in the regi ...
... macroeconomic fundamentals, reduced exposure to external vulnerabilities, and rather robust balance sheets of financial institutions supported the belief that Asia would successfully avoid economic recession. This view was also backed up by the fact that banking systems of most countries in the regi ...
Exchange Rates and Foreign Direct Investment
... Written for the Princeton Encyclopedia of the World Economy (Princeton University Press) By Linda S. Goldberg1 Vice President, Federal Reserve Bank of New York ...
... Written for the Princeton Encyclopedia of the World Economy (Princeton University Press) By Linda S. Goldberg1 Vice President, Federal Reserve Bank of New York ...
CON/2016/49 - ECB
... authorised by central banks, as this volatility does not always appear to be related to economic or financial factors. Other concerns are that: (a) unlike the holders of legally established currencies, the holders of virtual currency units typically have no guarantee that they will be able to exchan ...
... authorised by central banks, as this volatility does not always appear to be related to economic or financial factors. Other concerns are that: (a) unlike the holders of legally established currencies, the holders of virtual currency units typically have no guarantee that they will be able to exchan ...
Working Paper Explaining Global Financial Imbalances: A Critique of the Saving Glut
... with the strong dollar policy adopted after the East Asia financial crisis of 1997. Following the precedent established by the 1994 peso crisis, US policymakers ensured large dollar loans were made to crisis countries and the US also accepted large exchange rate depreciations by the crisis countries ...
... with the strong dollar policy adopted after the East Asia financial crisis of 1997. Following the precedent established by the 1994 peso crisis, US policymakers ensured large dollar loans were made to crisis countries and the US also accepted large exchange rate depreciations by the crisis countries ...
The Euro, the Dollar, and the International
... The falling value of the euro during the first 6 months of its introduction caused great concern to Wim Duisenberg (the Governor of the ECB), Hans Tietmayer, and Ernest Welteke (respectively, the retiring and the incoming president of the Bundesbank or German Central Bank), Dominique Strauss-Khan (t ...
... The falling value of the euro during the first 6 months of its introduction caused great concern to Wim Duisenberg (the Governor of the ECB), Hans Tietmayer, and Ernest Welteke (respectively, the retiring and the incoming president of the Bundesbank or German Central Bank), Dominique Strauss-Khan (t ...
routes to financial instability is iceland going down this route?
... TURKEY IN 2000- HAS IN SOME WAY INVOLVED A FIXED OR PEGGED EXCHANGE RATE REGIME. AT THE SAME TIME, COUNTRIES THAT DID NOT HAVE PEGGED RATES - AMONG THEM SOUTH AFRICA, ISRAEL IN 1998, MEXICO IN 1998 - AVOIDED CRISES OF THE TYPE THAT AFFLICTED EMERGING MARKET COUNTRIES WITH ...
... TURKEY IN 2000- HAS IN SOME WAY INVOLVED A FIXED OR PEGGED EXCHANGE RATE REGIME. AT THE SAME TIME, COUNTRIES THAT DID NOT HAVE PEGGED RATES - AMONG THEM SOUTH AFRICA, ISRAEL IN 1998, MEXICO IN 1998 - AVOIDED CRISES OF THE TYPE THAT AFFLICTED EMERGING MARKET COUNTRIES WITH ...
PDF file - AgEcon Search
... is a trade-off between greater exchange rate flexibility and the need for additional fiscal tightening, with the risk that the latter could result in expenditure arrears. While the authorities in Sudan recognizing this trade-off, and prefer pursuing a flexible exchange rate policy, they are concerne ...
... is a trade-off between greater exchange rate flexibility and the need for additional fiscal tightening, with the risk that the latter could result in expenditure arrears. While the authorities in Sudan recognizing this trade-off, and prefer pursuing a flexible exchange rate policy, they are concerne ...
Dual Currency Investment – Important Facts Statement
... Currency risk - If the Investment Currency and/or Linked Currency is/are not your home currency, and you choose to convert it back to your home currency, or if you receive the Linked Currency and choose to convert it back to the Investment Currency upon maturity, you should note that exchange rate f ...
... Currency risk - If the Investment Currency and/or Linked Currency is/are not your home currency, and you choose to convert it back to your home currency, or if you receive the Linked Currency and choose to convert it back to the Investment Currency upon maturity, you should note that exchange rate f ...
Contingent Liabilities
... Contingent liabilities are possible obligations that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the government. The public debt may be understated without reporting con ...
... Contingent liabilities are possible obligations that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the government. The public debt may be understated without reporting con ...
Exchange Rates
... the same recipe in 118 countries. The Big Mac PPP is the exchange rate that would leave burgers costing the same as in America. Comparing the PPP with the actual rate is one test of whether a currency is undervalued or overvalued. The first column of the table shows local-currency prices of a Big Ma ...
... the same recipe in 118 countries. The Big Mac PPP is the exchange rate that would leave burgers costing the same as in America. Comparing the PPP with the actual rate is one test of whether a currency is undervalued or overvalued. The first column of the table shows local-currency prices of a Big Ma ...
current account
... United States and other foreign countries, their profits are highly dependent upon the yen exchange rates. • When the yen appreciates, as it has done overall for the last 40 years, Japanese exports become more expensive to foreigners, so Japanese exporters make less profit. • However the rate has no ...
... United States and other foreign countries, their profits are highly dependent upon the yen exchange rates. • When the yen appreciates, as it has done overall for the last 40 years, Japanese exports become more expensive to foreigners, so Japanese exporters make less profit. • However the rate has no ...
Foreign exchange market intervention in emerging markets: motives
... During the first half of 1986, speculation against the riyal was triggered by a combination of lower oil prices, widening budget imbalances, falling foreign exchange reserves and a deteriorating balance of payments position. Against these macroeconomic odds, Saudi Arabia devalued the riyal in June 1 ...
... During the first half of 1986, speculation against the riyal was triggered by a combination of lower oil prices, widening budget imbalances, falling foreign exchange reserves and a deteriorating balance of payments position. Against these macroeconomic odds, Saudi Arabia devalued the riyal in June 1 ...
Mankiw8e_Student_PPTs_Chapter 13 - E-SGH
... The issues of open-economy macroeconomics have been very much in the news in recent years. At various European nations, most notably Greece, experienced severe financial difficulties, many observers wondered whether it was wise for much of the continent to adopt a common currency—the most extreme f ...
... The issues of open-economy macroeconomics have been very much in the news in recent years. At various European nations, most notably Greece, experienced severe financial difficulties, many observers wondered whether it was wise for much of the continent to adopt a common currency—the most extreme f ...
Macroeconomic Policy in Southeast Asian Countries and the Global
... Because of trade and capital liberalization in Southeast Asian Economies have been integrated through increasing ASEAN volume of trade, impact of GFC was transmitted to through monetary and trade channels. Domestic interest rates and capital flows were directly affected, in particular in countries w ...
... Because of trade and capital liberalization in Southeast Asian Economies have been integrated through increasing ASEAN volume of trade, impact of GFC was transmitted to through monetary and trade channels. Domestic interest rates and capital flows were directly affected, in particular in countries w ...
PPP GDP 2006 (millions of dollars)
... payments under Fixed Exchange Rates (2) Monetary Approach to Exchange Rate Determination (flexible price) ...
... payments under Fixed Exchange Rates (2) Monetary Approach to Exchange Rate Determination (flexible price) ...
Fixed Exchange Rates and Currency Unions
... Equilibrium levels of output and price level fall Maintained fixed exchange rate by reducing rate of economic growth Allows not only exchange rate to be fixed, but automatically adjusts economy for sustainable external equilibrium ...
... Equilibrium levels of output and price level fall Maintained fixed exchange rate by reducing rate of economic growth Allows not only exchange rate to be fixed, but automatically adjusts economy for sustainable external equilibrium ...
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.