The link between interest rates and exchange rates
... In recent years, there has been a special interest in the link between exchange rates and interest rates in both advanced and developing countries. This is understandable, given the important role these variables play in determining developments in the nominal and real sides of the economy, includin ...
... In recent years, there has been a special interest in the link between exchange rates and interest rates in both advanced and developing countries. This is understandable, given the important role these variables play in determining developments in the nominal and real sides of the economy, includin ...
Mizuho Dealer`s Eye
... 1. Review of the Previous Month As market participants focused on the possibility of a U.S. rate hike within the year, the dollar/yen pair moved with a heavy topside in September on lackluster U.S. economic indicators and concerns of a Chinese economic slowdown. With the FOMC holding off from raisin ...
... 1. Review of the Previous Month As market participants focused on the possibility of a U.S. rate hike within the year, the dollar/yen pair moved with a heavy topside in September on lackluster U.S. economic indicators and concerns of a Chinese economic slowdown. With the FOMC holding off from raisin ...
Ch. 21 - Weber State University
... An emerging market country that successfully used exchange-rate targeting to lower its inflation from above 100 percent in 1988 to below 10 percent in 1994 (before devaluation) was (a) Thailand. (b) Mexico. (c) Philippines. (d) Indonesia. Answer: Question Status: Previous Edition ...
... An emerging market country that successfully used exchange-rate targeting to lower its inflation from above 100 percent in 1988 to below 10 percent in 1994 (before devaluation) was (a) Thailand. (b) Mexico. (c) Philippines. (d) Indonesia. Answer: Question Status: Previous Edition ...
The economic and legal implications of speculative capital flows
... Balance of Payments Equation and the Mundell Fleming IS-LM-BP Model to highlight the effects of speculative capital flows on national economies. ...
... Balance of Payments Equation and the Mundell Fleming IS-LM-BP Model to highlight the effects of speculative capital flows on national economies. ...
Energising Money An introduction to energy currencies and
... producers of local renewable energy. Many of the case studies in this report illustrate the potential of local and more narrowly focussed energy currencies to engineer a low carbon energy transition from the ‗bottom-up‘. For these a different research agenda is required: How can we best capture the ...
... producers of local renewable energy. Many of the case studies in this report illustrate the potential of local and more narrowly focussed energy currencies to engineer a low carbon energy transition from the ‗bottom-up‘. For these a different research agenda is required: How can we best capture the ...
NBER WORKING PAPER SERIES THE SIMPLE GEOMETRY OF TRANSMISSION AND STABILIZATION
... in emphasis and style, a number of tightly related research agendas (from the ‘new neoclassical’synthesis to the ‘neo-Wicksellian’monetary economics to the ‘new open-economy macroeconomics’, and so on) have focused on the properties of choice-theoretic models with imperfectly competitive labor and/o ...
... in emphasis and style, a number of tightly related research agendas (from the ‘new neoclassical’synthesis to the ‘neo-Wicksellian’monetary economics to the ‘new open-economy macroeconomics’, and so on) have focused on the properties of choice-theoretic models with imperfectly competitive labor and/o ...
Why are some exchange rates more volatile than others? Evidence from
... of GDP in 2005 and 6,1 per cent in the …rst half of 2006). Figure 1 illustrates that, except for the Chilean peso, every economy among the ten worst-performing currencies against the dollar this year is expected to record de…cits on their current accounts in 2005 (and eight of the ten worst currency ...
... of GDP in 2005 and 6,1 per cent in the …rst half of 2006). Figure 1 illustrates that, except for the Chilean peso, every economy among the ten worst-performing currencies against the dollar this year is expected to record de…cits on their current accounts in 2005 (and eight of the ten worst currency ...
Slide 1
... crisis, were reluctant to abandon unsustainable exchange rates in a timely manner and only did so only after they were hit by a balance-of-payments crisis. At some level, the statement is right because if the exchange rate was allowed to float freely, some of the international reserve loss would h ...
... crisis, were reluctant to abandon unsustainable exchange rates in a timely manner and only did so only after they were hit by a balance-of-payments crisis. At some level, the statement is right because if the exchange rate was allowed to float freely, some of the international reserve loss would h ...
MEASURING EXCHANGE MARKET PRESSURE IN MONGOLIA
... Mongolia is expecting the world highest economic growth in coming decade. Its vast mineral deposits and stable investment opportunities are attracting massive foreign capital inflows in mineral sector and creating long lasting economic prosperity. As of 2010, net flow of FDI increased 2.8 times reac ...
... Mongolia is expecting the world highest economic growth in coming decade. Its vast mineral deposits and stable investment opportunities are attracting massive foreign capital inflows in mineral sector and creating long lasting economic prosperity. As of 2010, net flow of FDI increased 2.8 times reac ...
... when characterizing the classification of regime. In the literature, there are two types of classification options. The first option is a “de jure” classification, which is also IMF’s classification that is based on the publicly stated commitment of the central bank. Every IMF member country is requ ...
Free Full Text ( Final Version , 647kb )
... This chapter provides a literature review and theoretical framework which consists of the concept of exchange rates, its determinants and estimating methods. This chapter provides theories and previous studies on foreign exchange market. 2.2 The concept of foreign exchange rates Why do exchange rate ...
... This chapter provides a literature review and theoretical framework which consists of the concept of exchange rates, its determinants and estimating methods. This chapter provides theories and previous studies on foreign exchange market. 2.2 The concept of foreign exchange rates Why do exchange rate ...
Energising Money An introduction to energy currencies and
... replicate and scale-up the success, and transfer the models across national boundaries and different institutional infrastructures? Separate but linked currencies could be issued, perhaps by the same ‘energy banks’ or at a national level, as a means of payment without the need to be backed directly ...
... replicate and scale-up the success, and transfer the models across national boundaries and different institutional infrastructures? Separate but linked currencies could be issued, perhaps by the same ‘energy banks’ or at a national level, as a means of payment without the need to be backed directly ...
essays Why stricter rules threaten the eurozone
... eurozone leaders finally accepted what they had spent two years denying: that the Greek government was insolvent and would need to write off more of its debts; and that many banks were undercapitalised. But the comprehensive solution did nothing to correct the eurozone’s institutional flaws, or to r ...
... eurozone leaders finally accepted what they had spent two years denying: that the Greek government was insolvent and would need to write off more of its debts; and that many banks were undercapitalised. But the comprehensive solution did nothing to correct the eurozone’s institutional flaws, or to r ...
Seminar Paper No. 687 THE ZERO BOUND IN AN OPEN ECONOMY:
... Svensson [63] suggests that all the emergency measures prepared in advance by prudent central banks (see above) should be used, in the hope that some of these would work. In particular, a temporary exchange-rate peg is discussed [63, Section 5.3]: Could the central bank peg the exchange rate and thi ...
... Svensson [63] suggests that all the emergency measures prepared in advance by prudent central banks (see above) should be used, in the hope that some of these would work. In particular, a temporary exchange-rate peg is discussed [63, Section 5.3]: Could the central bank peg the exchange rate and thi ...
Sadeh, Tal (2007), `Managing a Common Currency: Political and
... MUNDELL International Trade and Factor Mobility, in: American Economic Review, 57, 3,1957, pp. 321-3'35. Robert MUNDELL, A Theory of Optimum Currency Areas, in: The Am:rican Economic Review, 51. 4,1961, pp. 657-665. George S. TAVLAS, The "New" Theory ofOphmum Cunency Areas, in: The World Economy, 16 ...
... MUNDELL International Trade and Factor Mobility, in: American Economic Review, 57, 3,1957, pp. 321-3'35. Robert MUNDELL, A Theory of Optimum Currency Areas, in: The Am:rican Economic Review, 51. 4,1961, pp. 657-665. George S. TAVLAS, The "New" Theory ofOphmum Cunency Areas, in: The World Economy, 16 ...
Yip, Paul SL, (2005). The Exchange Rate Systems in Hong
... and contributing to growth. This is particularly important for Asia in view of the high saving rates of the regional countries. In fact, Asia has been accused of over-saving and contributing to the “global saving glut”. (Bernanke, 2005) This surplus savings have mostly been channeled to the US, help ...
... and contributing to growth. This is particularly important for Asia in view of the high saving rates of the regional countries. In fact, Asia has been accused of over-saving and contributing to the “global saving glut”. (Bernanke, 2005) This surplus savings have mostly been channeled to the US, help ...
A Sentiment-based Explanation of the Forward Premium Puzzle*
... of this appreciation depends on the home agent’s risk aversion since risk aversion determines the reduction in the marginal utility. Therefore, the econometrician is likely to observe a smaller depreciation or even an appreciation of the home currency in the data. In particular, when risk aversion i ...
... of this appreciation depends on the home agent’s risk aversion since risk aversion determines the reduction in the marginal utility. Therefore, the econometrician is likely to observe a smaller depreciation or even an appreciation of the home currency in the data. In particular, when risk aversion i ...
Exchange Rate Pass-Through in Industrialized Countries
... microeconomic theory suggests, under certain conditions, such behaviour can be optimal from the firm’s perspective. It is clear, however, that PTM is possible only if there are economic and/or institutional constraints that prevent agents from exploiting international arbitrage opportunities in the ...
... microeconomic theory suggests, under certain conditions, such behaviour can be optimal from the firm’s perspective. It is clear, however, that PTM is possible only if there are economic and/or institutional constraints that prevent agents from exploiting international arbitrage opportunities in the ...
The Gold Standard, Bretton Woods and Other Monetary Regimes: A
... raised by the debate over fixed vs. flexible exchange rates. According to the traditional view, adherence to a (commodity-based) fixed exchange rate regime, such as the gold standard, ensured long-run price stability for the world as a whole because the fixed price of gold provided a mmminal anchor ...
... raised by the debate over fixed vs. flexible exchange rates. According to the traditional view, adherence to a (commodity-based) fixed exchange rate regime, such as the gold standard, ensured long-run price stability for the world as a whole because the fixed price of gold provided a mmminal anchor ...
Gold Standard: The Future for a Stable Global - Hizb ut
... Inflation would not occur to the same scale as it does if a nation adopted the Gold Standard. One need not look further than the price of gold as a commodity over the last few years.This is a symptom of people losing confidence in Fiat currencies and also the weakening in the purchasing power of suc ...
... Inflation would not occur to the same scale as it does if a nation adopted the Gold Standard. One need not look further than the price of gold as a commodity over the last few years.This is a symptom of people losing confidence in Fiat currencies and also the weakening in the purchasing power of suc ...
This PDF is a selection from a published volume from... National Bureau of Economic Research
... of risk aversion of the firms that are exporting them. When firms are sufficiently risk averse (loving), relatively more differentiated products will be exported to countries that have low (high) exchange rate volatilities with the exporting country. ...
... of risk aversion of the firms that are exporting them. When firms are sufficiently risk averse (loving), relatively more differentiated products will be exported to countries that have low (high) exchange rate volatilities with the exporting country. ...
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.