Regional currency areas and the use of foreign currencies
... reference currency, allowing the exchange rate to fluctuate, and thereby reclaiming monetary policy autonomy. In the case of Lesotho these features were not introduced. Rather, a conscious policy decision was taken to preserve the old order. The only new variable in the new scheme of things was the ...
... reference currency, allowing the exchange rate to fluctuate, and thereby reclaiming monetary policy autonomy. In the case of Lesotho these features were not introduced. Rather, a conscious policy decision was taken to preserve the old order. The only new variable in the new scheme of things was the ...
The euro in the `currency war` - Centre for Economic Policy Research
... 3 This inability to combine independent monetary policy, exchange-rate policy, and international capital mobility is known as Mundell’s impossible trinity, after Canadian economist and 1999 Nobel laureate Robert Mundell. 4 Article 219.2 of the Treaty states that “the Council […] may formulate gene ...
... 3 This inability to combine independent monetary policy, exchange-rate policy, and international capital mobility is known as Mundell’s impossible trinity, after Canadian economist and 1999 Nobel laureate Robert Mundell. 4 Article 219.2 of the Treaty states that “the Council […] may formulate gene ...
The Euro-Dollar Market: Some Unresolved Issues.
... leads to an equivalent diminution of the lending bank's cash reserves in American banks. In theory, this process would give rise to a series of dollar loans and deposits abroad based on one dollar deposit in the United States. Moreover, it could have a much larger multiplier than the analogous proce ...
... leads to an equivalent diminution of the lending bank's cash reserves in American banks. In theory, this process would give rise to a series of dollar loans and deposits abroad based on one dollar deposit in the United States. Moreover, it could have a much larger multiplier than the analogous proce ...
Apocalypse Then: The Evolution of the North Atlantic Economy
... the UK, Swiss, German, and Irish banks in the US reflects ownership of US investment banking operations. For Canada and Japan, by contrast, the links are mainly from commercial banking (this is also true for France and the Netherlands, but here there is a catch as the investment operations of these ...
... the UK, Swiss, German, and Irish banks in the US reflects ownership of US investment banking operations. For Canada and Japan, by contrast, the links are mainly from commercial banking (this is also true for France and the Netherlands, but here there is a catch as the investment operations of these ...
Document
... between the return of gold and oil prices was weak and asymmetric because gold is the least volatile commodity, whereas oil is a very volatile commodity. Many factors affect crude oil price, such as the change in global oil demand and supply conditions in response to geopolitics, institutional arran ...
... between the return of gold and oil prices was weak and asymmetric because gold is the least volatile commodity, whereas oil is a very volatile commodity. Many factors affect crude oil price, such as the change in global oil demand and supply conditions in response to geopolitics, institutional arran ...
The IMF and Troika`s Greek bailout programs: an East
... opaque private-labelled mortgaged- and asset-backed securities throughout the world instantaneously brought down the entire banking system in both the U.S. and core economies in the Eurozone. Under these circumstances, the revelation that the Greek government had actually accumulated more foreign de ...
... opaque private-labelled mortgaged- and asset-backed securities throughout the world instantaneously brought down the entire banking system in both the U.S. and core economies in the Eurozone. Under these circumstances, the revelation that the Greek government had actually accumulated more foreign de ...
The Adjustment Mechanism: Theory and Problems Rudiger Dornbusch*
... of U.S. assets bring about a bargain basement sell-off of U.S. assets to foreign firms. An even lower dollar may ultimately be required to balance the current account, but an even lower dollar seems to put all of U.S. real assets in easy reach of foreign investors. The International Monetary Fund (I ...
... of U.S. assets bring about a bargain basement sell-off of U.S. assets to foreign firms. An even lower dollar may ultimately be required to balance the current account, but an even lower dollar seems to put all of U.S. real assets in easy reach of foreign investors. The International Monetary Fund (I ...
dealing with foreign exchange
... petrodollar economies developed sovereign wealth funds (SWF) channeling a part of their reserves. This could be a risky venture for Bangladesh on two grounds. First, foreign exchange reserves are extremely liquid assets and any turnaround in import growth could increase the demand for US Dollar dece ...
... petrodollar economies developed sovereign wealth funds (SWF) channeling a part of their reserves. This could be a risky venture for Bangladesh on two grounds. First, foreign exchange reserves are extremely liquid assets and any turnaround in import growth could increase the demand for US Dollar dece ...
PDF
... countries and assuming that there is no future or forward market for foreign exchange such that the exporters cannot lock a price, they can incur a risk at the moment of the conversion (Bailey et al., 1987). Clearly, a company which is selling its goods abroad will be paid in the currency of the buy ...
... countries and assuming that there is no future or forward market for foreign exchange such that the exporters cannot lock a price, they can incur a risk at the moment of the conversion (Bailey et al., 1987). Clearly, a company which is selling its goods abroad will be paid in the currency of the buy ...
EMU strategies: Lessons from Greece in view of the EU Enlargement
... ERM, and the European Currency Unit, ECU. The ERM set a central exchange rate towards the ECU for each participating currency. On the basis of such rates, bilateral “central rates” were established. The fluctuation margins around bilateral central rates were fixed at 2.25% for all currencies except ...
... ERM, and the European Currency Unit, ECU. The ERM set a central exchange rate towards the ECU for each participating currency. On the basis of such rates, bilateral “central rates” were established. The fluctuation margins around bilateral central rates were fixed at 2.25% for all currencies except ...
Working Papers - CESifo Group Munich
... planned current account deficit is a net supply of American assets in the international capital markets. If the planned current account deficit goes up and if the price of the dollar is the price of American assets, the value of the dollar will fall, rather than rise, when the capital flow into the ...
... planned current account deficit is a net supply of American assets in the international capital markets. If the planned current account deficit goes up and if the price of the dollar is the price of American assets, the value of the dollar will fall, rather than rise, when the capital flow into the ...
Fixed Exchange Rates
... lose control over r. under fixed e monetary stimulus causes a loss of reserves, and fiscal stimulus causes reserves to increase. • Under flexible e monetary stimulus causes depreciation and fiscal stimulus causes an appreciation, and vice versa. Copyright © 2012 Pearson Addison-Wesley. All rights re ...
... lose control over r. under fixed e monetary stimulus causes a loss of reserves, and fiscal stimulus causes reserves to increase. • Under flexible e monetary stimulus causes depreciation and fiscal stimulus causes an appreciation, and vice versa. Copyright © 2012 Pearson Addison-Wesley. All rights re ...
Great Depression Economic history
... The initial decline in U.S. output in the summer of 1929 is widely believed to have stemmed from tight U.S. monetary policy aimed at limiting stock market speculation. The 1920s had been a prosperous decade, but not an exceptional boom period; prices had remained nearly constant throughout the decad ...
... The initial decline in U.S. output in the summer of 1929 is widely believed to have stemmed from tight U.S. monetary policy aimed at limiting stock market speculation. The 1920s had been a prosperous decade, but not an exceptional boom period; prices had remained nearly constant throughout the decad ...
4. Trading with the World: The gains from international trade
... The asset market approach to pricing exchange rate expectations: The exchange rate is the relative price of two currencies determined by investors’ expectations about these currencies. Foreign capital investment is attracted by economic growth and high interest rates; this capital inflow leads to ...
... The asset market approach to pricing exchange rate expectations: The exchange rate is the relative price of two currencies determined by investors’ expectations about these currencies. Foreign capital investment is attracted by economic growth and high interest rates; this capital inflow leads to ...
Class 17 Lecture notes (to be posted after class)
... – El Salvador – Haiti – Honduras – Jordan • >5% of GDP for 42 countries in 2004. • Global flows: $318 billion in 2007 • > other important external financial sources (ODA, bank lending, private investment) ...
... – El Salvador – Haiti – Honduras – Jordan • >5% of GDP for 42 countries in 2004. • Global flows: $318 billion in 2007 • > other important external financial sources (ODA, bank lending, private investment) ...
The Emerging Market Economies in Times of Taper-Talk and Actual Tapering
... Therefore, I next focus separately on the changes in nominal exchange rates and international reserves for each of these two periods. I follow Eichengreen and Gupta (2014) and Ghosh et al. (2014) in order to determine the set of EME included in the analysis. See Table 1 for the list of countries. In ...
... Therefore, I next focus separately on the changes in nominal exchange rates and international reserves for each of these two periods. I follow Eichengreen and Gupta (2014) and Ghosh et al. (2014) in order to determine the set of EME included in the analysis. See Table 1 for the list of countries. In ...
Asian Currency and Financial Crises: Lessons from Vulnerability
... provide a very helpful overall descriptive account of what happened. Conceptually they focus on a contrast between two rather different categories of explanation: ‘underlying structural weaknesses and macroeconomic policies such that crisis was inevitable’ versus ‘a sudden run on the currency which ...
... provide a very helpful overall descriptive account of what happened. Conceptually they focus on a contrast between two rather different categories of explanation: ‘underlying structural weaknesses and macroeconomic policies such that crisis was inevitable’ versus ‘a sudden run on the currency which ...
Eco 344
... • http://www.economist.com/blogs/dailychart/201 1/09/government-bonds/print • Bond price is negatively related to yield (interest rate) • The yield of Greek bond is highest, so the price of Greek bond is lowest. • US bond is still popular • Demand-and-supply diagram can be applied to the bond market ...
... • http://www.economist.com/blogs/dailychart/201 1/09/government-bonds/print • Bond price is negatively related to yield (interest rate) • The yield of Greek bond is highest, so the price of Greek bond is lowest. • US bond is still popular • Demand-and-supply diagram can be applied to the bond market ...
3 Effects of the Strong Dollar - Federal Reserve Bank of Kansas City
... the United States had been less lopsided, the dollar would have risen much less. This, then, is the counterfactual scenario. It is worth noting, parenthetically, that if one were trying to assess the benefits and costs of exchange-rate movements-which I am not doing in this papewone would want to ta ...
... the United States had been less lopsided, the dollar would have risen much less. This, then, is the counterfactual scenario. It is worth noting, parenthetically, that if one were trying to assess the benefits and costs of exchange-rate movements-which I am not doing in this papewone would want to ta ...
International Monetary Policy - 13 IS-LM Model in Open
... temporarily into deficits until quantities imported decrease and quantities exported increase. We will assume that the Marshall-Lerner conditions are satisfied, so that the current account increase as the domestic currency depreciates. Don’t worry about this Michele Piffer (London School of Economic ...
... temporarily into deficits until quantities imported decrease and quantities exported increase. We will assume that the Marshall-Lerner conditions are satisfied, so that the current account increase as the domestic currency depreciates. Don’t worry about this Michele Piffer (London School of Economic ...
NBER WORKING PAPER SERIES SELF-VALIDATING OPTIMUM CURRENCY AREAS Giancarlo Corsetti Paolo Pesenti
... exporters could in principle choose any intermediate level of pass-through, in equilibrium pass-through is either 100 percent or zero as producers optimally choose ‘corner’ pricing strategies to prevent their markups from being affected by exchange rate fluctuations.2 There is one equilibrium in whi ...
... exporters could in principle choose any intermediate level of pass-through, in equilibrium pass-through is either 100 percent or zero as producers optimally choose ‘corner’ pricing strategies to prevent their markups from being affected by exchange rate fluctuations.2 There is one equilibrium in whi ...
NBER WORKING PAPER SERIES THE DOLLAR AND ITS DISCONTENTS Olivier Jeanne
... system are discussed in the last section. The main point is that if the consumption-based return on dollar reserves is low for the reasons conjectured in this paper, it is not a problem that the international monetary system should try to solve. If reserves are accumulated primarily by countries tha ...
... system are discussed in the last section. The main point is that if the consumption-based return on dollar reserves is low for the reasons conjectured in this paper, it is not a problem that the international monetary system should try to solve. If reserves are accumulated primarily by countries tha ...
is a monetary union in caricom desirable?
... appearance of asymmetric shocks. This analysis is closely akin to Kenen’s for whom only diversified economies enough could accept the fixedness of the exchange rates. There are two major objections to this argument. First of all, the movement of geographical integration can take place in border zone ...
... appearance of asymmetric shocks. This analysis is closely akin to Kenen’s for whom only diversified economies enough could accept the fixedness of the exchange rates. There are two major objections to this argument. First of all, the movement of geographical integration can take place in border zone ...
The Framework of Trade in the Council for Mutual Economic
... America, of Great Britain, and of certain western European states had boycotted trade relations with the countries of people’s democracy and the USSR because these countries did not consider it appropriate that they should submit themselves to the dictatorship of the Marshall Plan, which would have ...
... America, of Great Britain, and of certain western European states had boycotted trade relations with the countries of people’s democracy and the USSR because these countries did not consider it appropriate that they should submit themselves to the dictatorship of the Marshall Plan, which would have ...
Monetary Policy and Economic Growth of Nigeria
... (Kogar 1995) examinee the relationship between financial innovations and monetary control and concludes that in a changing financial structure, Central Banks cannot realize efficient monetary policy without setting new procedures and instruments in the long-run, because profit seeking financial inst ...
... (Kogar 1995) examinee the relationship between financial innovations and monetary control and concludes that in a changing financial structure, Central Banks cannot realize efficient monetary policy without setting new procedures and instruments in the long-run, because profit seeking financial inst ...