Optimal Currency Areas: Theory and Evidence for an African Single
... integration. This study focuses on the economic elements of monetary union, placing it firmly within the context of the theory of optimal currency areas and with special reference to Africa. An assessment of theoretical and applied empirical literature is discussed. This encompasses a discussion of ...
... integration. This study focuses on the economic elements of monetary union, placing it firmly within the context of the theory of optimal currency areas and with special reference to Africa. An assessment of theoretical and applied empirical literature is discussed. This encompasses a discussion of ...
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... momentum and finally turned into a bubble that burst in 2007, when the American financial crisis swept over to Europe. 1 In Greece and Portugal the government sectors used the credit to raise public-sector wages and hire more public employees, while in Spain and Ireland investors borrowed to buy re ...
... momentum and finally turned into a bubble that burst in 2007, when the American financial crisis swept over to Europe. 1 In Greece and Portugal the government sectors used the credit to raise public-sector wages and hire more public employees, while in Spain and Ireland investors borrowed to buy re ...
Mankiw 5/e Chapter 5: The Open Economy
... How NX depends on ε ε U.S. goods become more expensive relative to foreign goods ...
... How NX depends on ε ε U.S. goods become more expensive relative to foreign goods ...
Mankiw 5/e Chapter 5: The Open Economy
... How NX depends on ε ε U.S. goods become more expensive relative to foreign goods ...
... How NX depends on ε ε U.S. goods become more expensive relative to foreign goods ...
NBER WORKING PAPER SERIES A CASE FOR ‘INSTITUTIONS SUBSTITUTION’
... and (2002). The article is intentionally short on technical details which are contained in these papers. The central idea is that abandoning national currencies and adopting a hard currency, when seen from the perspective of emerging economies facing non-credible policy-making institutions and imper ...
... and (2002). The article is intentionally short on technical details which are contained in these papers. The central idea is that abandoning national currencies and adopting a hard currency, when seen from the perspective of emerging economies facing non-credible policy-making institutions and imper ...
- SAS
... and tax policy, but rather the compounded effects of inherent fragility of the external accounts and their vulnerability to the contagion of crises of confidence elsewhere. The Social Cost of the Default We also question the view that the default was the main factor responsible for Argentina’s deep ...
... and tax policy, but rather the compounded effects of inherent fragility of the external accounts and their vulnerability to the contagion of crises of confidence elsewhere. The Social Cost of the Default We also question the view that the default was the main factor responsible for Argentina’s deep ...
Open Economy Macroeconomics: Basic Concepts
... I. Basic Economic Concepts (8–12%) A. Scarcity, choice, and opportunity costs B. Production possibilities curve C. Comparative advantage, specialization, and exchange D. Demand, supply, and market equilibrium E. Macroeconomic issues: business cycle, unemployment, inflation, growth Course introductio ...
... I. Basic Economic Concepts (8–12%) A. Scarcity, choice, and opportunity costs B. Production possibilities curve C. Comparative advantage, specialization, and exchange D. Demand, supply, and market equilibrium E. Macroeconomic issues: business cycle, unemployment, inflation, growth Course introductio ...
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... the euro area, reflecting, in part, linguistic and cultural differences, the mobility of capital has been increasing as evidenced by the positive effect that the euro has had on intra-euro area FDI. Between 1999 and 2006 (the latest data available), the stock of euro area FDI more than doubled, from ...
... the euro area, reflecting, in part, linguistic and cultural differences, the mobility of capital has been increasing as evidenced by the positive effect that the euro has had on intra-euro area FDI. Between 1999 and 2006 (the latest data available), the stock of euro area FDI more than doubled, from ...
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... but they would have disrupted the detailed economic plans promulgated by the authorities and, therefore, met with official resistance. Thus, controls were imposed over the very movements of goods and labor that were crucial for progress toward the professed goal of economic integration. The shortcom ...
... but they would have disrupted the detailed economic plans promulgated by the authorities and, therefore, met with official resistance. Thus, controls were imposed over the very movements of goods and labor that were crucial for progress toward the professed goal of economic integration. The shortcom ...
Demand Imbalances, Exchange Rate Misalignment and Monetary Policy
... lighting the forward-looking nature of exchange rate determination.5 With a complete set of Arrow-Debreu securities – the case studied by DE – goods price stabilization, the same monetary policy that would be optimal in the face of standard, unanticipated technology shocks, is also optimal in respo ...
... lighting the forward-looking nature of exchange rate determination.5 With a complete set of Arrow-Debreu securities – the case studied by DE – goods price stabilization, the same monetary policy that would be optimal in the face of standard, unanticipated technology shocks, is also optimal in respo ...
Exchange rate overshooting and the costs of floating April 2004 1 Michele Cavallo
... costs of a currency crisis in a country with a high level of foreign currency debt. The key mechanism of the model is the presence of a margin constraint (as in Aiyagari and Gertler, 1999) imposed on the domestic country. We find the margin constraint a simple and convenient way of modeling the sudd ...
... costs of a currency crisis in a country with a high level of foreign currency debt. The key mechanism of the model is the presence of a margin constraint (as in Aiyagari and Gertler, 1999) imposed on the domestic country. We find the margin constraint a simple and convenient way of modeling the sudd ...
CONCLUSIONS: GLOBALISATION AND THE END OF THE NATION
... analysis, the power of an interest group to assert its preferences is directly related to its capacity to move, which in turn depends on the mobility of its factor. If an interest group is able to credibly threaten leaving the country, its bargaining power increases. Therefore, globalization reduces ...
... analysis, the power of an interest group to assert its preferences is directly related to its capacity to move, which in turn depends on the mobility of its factor. If an interest group is able to credibly threaten leaving the country, its bargaining power increases. Therefore, globalization reduces ...
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... Currently servicing old loans means less money is available for privatisation process and established their own netcurrent consumption spending and real estate investworks (IMF 2012). This implies that shocks such as ments. Consequently, household demand for loans has the sovereign bond crisis rapid ...
... Currently servicing old loans means less money is available for privatisation process and established their own netcurrent consumption spending and real estate investworks (IMF 2012). This implies that shocks such as ments. Consequently, household demand for loans has the sovereign bond crisis rapid ...
A Currency Union or an Exchange Rate Union: Evidence from
... growth strategy for their economic development. This development strategy increases the openness of their economies. The more open the economy is, the more its output is affected by changes in the currency value. A common currency or a collective peg helps to stabilize exchange rates, and then reduc ...
... growth strategy for their economic development. This development strategy increases the openness of their economies. The more open the economy is, the more its output is affected by changes in the currency value. A common currency or a collective peg helps to stabilize exchange rates, and then reduc ...
Pacific Basin Working Paper Series $ · )
... already apparent. Was the recovery from financial and currency crisis relatively brief? Or was the recovery instead lackluster and spread out over an extended period, punctuated by periodic episodes of financial instability or recession? Did foreign (as well as domestic) funds return quickly, on a s ...
... already apparent. Was the recovery from financial and currency crisis relatively brief? Or was the recovery instead lackluster and spread out over an extended period, punctuated by periodic episodes of financial instability or recession? Did foreign (as well as domestic) funds return quickly, on a s ...
The Long or Short of it: Determinants of Foreign Currency
... format of Calvo-style contracts. In contrast to the other papers, a monetary policy rule is specified that adjusts the interest rate in response to inflation. (In this setting, a positive domestic productivity shock causes a nominal exchange rate depreciation - accordingly, the optimal hedge is for ...
... format of Calvo-style contracts. In contrast to the other papers, a monetary policy rule is specified that adjusts the interest rate in response to inflation. (In this setting, a positive domestic productivity shock causes a nominal exchange rate depreciation - accordingly, the optimal hedge is for ...
The Demand for Money
... form of money rather than secure bonds, why do people hold any money? To fund current expenditure on goods and services. An increase in real GDP increases the volume of expenditure, and we assume that this increases the quantity of real money that people plan to hold. ...
... form of money rather than secure bonds, why do people hold any money? To fund current expenditure on goods and services. An increase in real GDP increases the volume of expenditure, and we assume that this increases the quantity of real money that people plan to hold. ...
EC108 Macroeconomics 1 Review Class
... (b) Suppose the economy is hit by a transitory supply shock vt > 0. Explain graphically how the economy returns to its short-run equilibrium. Answer. This situation is illustrated in figure 5. Start from full equilibrium (point A). The economy is hit by a transitory shock that will have effect only at ...
... (b) Suppose the economy is hit by a transitory supply shock vt > 0. Explain graphically how the economy returns to its short-run equilibrium. Answer. This situation is illustrated in figure 5. Start from full equilibrium (point A). The economy is hit by a transitory shock that will have effect only at ...
a comparison of the classical black-scholes model
... a trading strategy that uses market instruments to ‘replicate’ the initial and final positions required by the derivative. If we have two strategies with the same initial position, and guaranteed final positions, then these final positions must be equal. Otherwise, by going long on the strategy with th ...
... a trading strategy that uses market instruments to ‘replicate’ the initial and final positions required by the derivative. If we have two strategies with the same initial position, and guaranteed final positions, then these final positions must be equal. Otherwise, by going long on the strategy with th ...
Financial Globalization and Exchange Rates Philip R. Lane Gian Maria Milesi-Ferretti
... recent decades. This process has involved sharply rising foreign asset and liability positions, whether scaled by GDP or by domestic financial variables (Lane and Milesi-Ferretti 2003, Obstfeld and Taylor 2004). In addition to larger gross positions, financial globalization has also allowed a greate ...
... recent decades. This process has involved sharply rising foreign asset and liability positions, whether scaled by GDP or by domestic financial variables (Lane and Milesi-Ferretti 2003, Obstfeld and Taylor 2004). In addition to larger gross positions, financial globalization has also allowed a greate ...
The 1980s financial liberalization in the Nordic
... market conditions. The countries were significant exporters, for example, in the forest and engineering industries. Financial isolation of the economy was considered important, because of the intent to use the interest rate as a policy instrument and to keep the level of interest rates low. Investme ...
... market conditions. The countries were significant exporters, for example, in the forest and engineering industries. Financial isolation of the economy was considered important, because of the intent to use the interest rate as a policy instrument and to keep the level of interest rates low. Investme ...
Redalyc.Non-Linear Multivariate Dependence between the Mexican
... Much research has been done to examine the relationship between the spot exchange rate and stock price in various economies. Most of the findings state that when the value of the local currency depreciates compared with major currencies, such as the dollar, euro or pound sterling, the local stock ma ...
... Much research has been done to examine the relationship between the spot exchange rate and stock price in various economies. Most of the findings state that when the value of the local currency depreciates compared with major currencies, such as the dollar, euro or pound sterling, the local stock ma ...
International Economics, 10e (Krugman/Obstfeld/Melitz) Chapter 17
... B) the price of the domestic basket in terms of the foreign one. C) the price of a domestic basket. D) the price of the foreign basket in terms of the domestic basket. E) the price of different goods baskets in the same market. Answer: D Page Ref: 451-455 Difficulty: Easy 23) Explain how does an inc ...
... B) the price of the domestic basket in terms of the foreign one. C) the price of a domestic basket. D) the price of the foreign basket in terms of the domestic basket. E) the price of different goods baskets in the same market. Answer: D Page Ref: 451-455 Difficulty: Easy 23) Explain how does an inc ...
Exchange rate
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In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, FX rate or Agio) between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency. For example, an interbank exchange rate of 119 Japanese yen (JPY, ¥) to the United States dollar (US$) means that ¥119 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥119. In this case it is said that the price of a dollar in terms of yen is ¥119, or equivalently that the price of a yen in terms of dollars is $1/119.Exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers where currency trading is continuous: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday. The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.In the retail currency exchange market, a different buying rate and selling rate will be quoted by money dealers. Most trades are to or from the local currency. The buying rate is the rate at which money dealers will buy foreign currency, and the selling rate is the rate at which they will sell the currency. The quoted rates will incorporate an allowance for a dealer's margin (or profit) in trading, or else the margin may be recovered in the form of a commission or in some other way. Different rates may also be quoted for cash (usually notes only), a documentary form (such as traveler's cheques) or electronically (such as a credit card purchase). The higher rate on documentary transactions has been justified to compensate for the additional time and cost of clearing the document, while the cash is available for resale immediately. Some dealers on the other hand prefer documentary transactions because of the security concerns with cash.