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... A currency board is a system for maintaining the value of the local currency with respect to some other specified currency. For example, Hong Kong has tied the value of the Hong Kong dollar to the U.S. dollar (HK$7.8 = $1) since 1983, while Argentina has tied the value of its peso to the U.S. dollar ...
NBER WORKING PAPER SERIES WHY CLASHES BETWEEN INTERNAL AND EXTERNAL STABILITY GOALS END
NBER WORKING PAPER SERIES WHY CLASHES BETWEEN INTERNAL AND EXTERNAL STABILITY GOALS END

... passed. These events, moreover, were rarely characterized by the type of duress crises today are subject to. For peripheral countries, such as the Latin American countries, however, the pattern set by the core countries is not observed. They suspended convertibility and altered parities when subordi ...
Slide 1
Slide 1

... • The structure of the economies in the EU’s economic and monetary union is important for determining how members respond to aggregate demand shocks. – The economies of EU members are similar in the sense that there is a high volume of intra-industry trade relative to the total volume. – They are di ...
China, the US, and Currency Issues
China, the US, and Currency Issues

... • In the 1990s Germany euthanized its beloved currency. ...
Global Economic Insight The Future of the US Dollar
Global Economic Insight The Future of the US Dollar

... because they must be computed from all the constituent currencies at all the relevant maturities. (4) Consequently futures markets in the composite currency (or commodities such as oil priced in synthetic currencies) will not be as efficient because the interest rates that permit arbitrage between s ...
Chapter 9:
Chapter 9:

... of equity markets growing faster than world output, the impact of equity markets on exchange values is expected to increase. For Critical Analysis: If foreigners are net investors in the U.S., all else constant, the U.S. dollar should appreciate and U.S. exports will fall while U.S. imports will ris ...
Course syllabus - City, University of London
Course syllabus - City, University of London

... An essay (limit 2000 words) will be required for each part of the course. Each essay will count for 10 percent of the mark. Essay topics will be handed out in approximately the sixth week of each term and completed essays will be due at the end of that term. An exam covering both parts will be held ...
may 2013 treasury management 2 solutions
may 2013 treasury management 2 solutions

... this causes a depreciation of the current account (a bigger deficit or smaller surplus). After some time, though, the volume of exports may start to rise because of their lower more competitive prices to foreign buyers, and domestic consumers may buy fewer of the costlier imports. Eventually, if thi ...
The Fall of the Rupee Prabhat Patnaik
The Fall of the Rupee Prabhat Patnaik

... Now, it so happens that the nineties of the last century and the early years of the present, i.e. precisely the period when India started its neo-liberal policies, were periods of boom in the metropolis, especially in the U.S., because of a series of “bubbles”, first the “dot-com bubble” and then th ...
The Costs and Benefits of the Euro In European Monetary Union
The Costs and Benefits of the Euro In European Monetary Union

... manufacturer could end up getting far less for his product then he should have, or the importer could pay much more than was originally agreed upon (Eudey, pp. 14-15). The elimination of this risk will help international trade, therefore, giving advantages to all EMU countries. Two other major benef ...
China, the US, and Currency Issues
China, the US, and Currency Issues

... those who call for a fixed exchange rate are right in the short run. And those who call for a floating exchange rate are right in the long run. How long is the short run, you ask? You must understand. China is 8000 years old. So when I say, short run, it could be 100 years.” -- Li Ruogu, Deputy Gove ...
* Director del equipo de Planeación y Evaluación de la Rectoría
* Director del equipo de Planeación y Evaluación de la Rectoría

... How can the authorities reduce the flow of the foreign exchange surplus and thus allow the peso to depreciate? By gradually reducing the restrictions that limit the money supply – such as the famous cut and the more modern action on monetary conditions and reference rates – so that interest rates ar ...
Exchange Rates
Exchange Rates

...  Usually to set up a factory or purchase shares in a foreign business  Increase in FDI increases demand leading to appreciating currency  Increasing inflows of FDI into Asia leads to an appreciation of the Asian currencies  Trade and current account deficits  Importing more increases the supply ...
Filip Křepelka, Masarykova univerzita (krepelka@law
Filip Křepelka, Masarykova univerzita (krepelka@law

... banknotes and guaranted change for gold has been stopped by national laws or practices. Several European currencies collapsed in hyperinflation. Only several states continued gold coverage of their currencies. Several other countries attempted to do it (including Czechoslovakia). Since the second wo ...
ANTICIPATING STRATEGIC CHANGE FROM ECONOMIC SHOCKS
ANTICIPATING STRATEGIC CHANGE FROM ECONOMIC SHOCKS

... crises, and to consider implications of the causal interplay of major economic and geopolitical factors for international strategy. During the five-year period 2003-2007, global perceptions of risk were unusually low, at least as reflected in market pricing of sovereign debt, corporate debt, and opt ...
Monetary policy performance goals and results for the first half of
Monetary policy performance goals and results for the first half of

... on the one hand, and retaining business activity and demand for monetary resources, on the other hand, the NBKR so far doesn’t see any reasons for reviewing the target inflation deliverable for 2006 set at the level of less than 5.7%. For information: As per the NSC’s updated information, the inflat ...
Answers - University of California, Berkeley
Answers - University of California, Berkeley

... True. Fiscal policy is not effective with flexible exchange rates because it creates an appreciation of the real exchange rate, which in turn shifts the IS curve back in. (f) Uncovered interest parity states that countries with high interest rates will see their currency appreciate over time, as the ...
Tutorial 10 - City University of Hong Kong
Tutorial 10 - City University of Hong Kong

... specialized banks can make. First of all, a money supply target is calculated by the central bank according to the needs of economic growth, price level increase etc. The plan includes the quota for new loans and targets for deposits for the specialized banks. Then the central bank informs the speci ...
NBER WORKING PAPER SERIES THE GREAT DEPRESSION ANALOGY Michael D. Bordo Harold James
NBER WORKING PAPER SERIES THE GREAT DEPRESSION ANALOGY Michael D. Bordo Harold James

... inflows and, given the Fed’s preferred operating procedures, created a problem for it. Today the Fed follows an interest rate target and it can pay interest on reserves (IOR). The build up of reserves reflected sterilization of the Fed’s liquidity operations using interest on reserves,(when the fede ...
european financial markets and its implications for turkish
european financial markets and its implications for turkish

... investments will be converted to Euro as of January 1, 1999. Money market placements, on the other hand, will continue to be traded in their original currencies until July 1, 2002. The fixing of the Deutsche mark rate against the Euro, the Euro’s value against other currencies in the international m ...
Monetary Integration and the Euro
Monetary Integration and the Euro

... Rising tensions in the end of 1960s brought forward debate about benefits of stable currency (strong perception of advantages of single currency) ...
Practice 40
Practice 40

... the price level in Japan increases by 50%, but there is no change in the price level in the United States. Which of the following is true? A. The nominal exchange rate of the yen has appreciated against the dollar. B. The nominal exchange rate of the dollar as depreciated against the yen. C. The rea ...
The European crisis in the context of the history of previous financial
The European crisis in the context of the history of previous financial

... 1. The flows almost always produced an expansion of the banking system in the importing country. That expansion could turn into a source of instability if banks became unable to repay credits, either because of a liquidity or a solvency problem. When countries credibly adopted the gold standard, the ...
ECON 10020/20020 Principles of Macroeconomics
ECON 10020/20020 Principles of Macroeconomics

... they have a comparative advantage. All of the following are reasons for this except (A) not all goods and services are traded internationally. (B) some countries have more resources than other countries. X B (C) tastes for many traded goods are different in many countries because of globalization. ( ...
SEMINAR IN INTERNATIONAL RELATIONS
SEMINAR IN INTERNATIONAL RELATIONS

... This course explores the interaction of international monetary and financial developments, on the one hand, and international and domestic politics, on the other. It examines both theoretical perspectives on, and empirical evidence regarding stability of the international monetary system, causes and ...
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Bretton Woods system

The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western Europe, Australasia and Japan in the mid-20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to gold and the ability of the IMF to bridge temporary imbalances of payments. Also, there was a need to address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well.Preparing to rebuild the international economic system while World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. The delegates deliberated during 1–22 July 1944, and signed the Bretton Woods agreement on its final day. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, these accords established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. The United States, which controlled two thirds of the world's gold, insisted that the Bretton Woods system rest on both gold and the US dollar. Soviet representatives attended the conference but later declined to ratify the final agreements, charging that the institutions they had created were ""branches of Wall Street."" These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.On 15 August 1971, the United States unilaterally terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency. This action, referred to as the Nixon shock, created the situation in which the United States dollar became a reserve currency used by many states. At the same time, many fixed currencies (such as the pound sterling, for example), also became free-floating.
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