What are the Sources of Current Account Fluctuations in the G6
... model is then linearized, and the restrictions from the present value model are then tested for Australia, Canada and the UK in a similar fashion to the pioneering work of Campbell (1987). The introduction of variable interest rates and the RER allows for the analysis of the role played by external ...
... model is then linearized, and the restrictions from the present value model are then tested for Australia, Canada and the UK in a similar fashion to the pioneering work of Campbell (1987). The introduction of variable interest rates and the RER allows for the analysis of the role played by external ...
The Political Economy of Monetary Institutions
... from a purely floating-exchange-rate system, where market forces determine currency values, to an irrevocable exchange-rate peg or common currency among countries.1 While exchange-rate regimes are usually distinguished by the degree of flexibility in the arrangement (from a free float to an immutabl ...
... from a purely floating-exchange-rate system, where market forces determine currency values, to an irrevocable exchange-rate peg or common currency among countries.1 While exchange-rate regimes are usually distinguished by the degree of flexibility in the arrangement (from a free float to an immutabl ...
Fiscal Multipliers: Lessons from the Great Recession for Small Open
... and 2009. Policymakers in advanced countries agreed on pursuing a strongly expansionary stance—either via explicit discretionary stimulus measures, or by letting automatic stabilizers work to their full extent, disregarding the implied strong deterioration of fiscal deficits (see Corsetti and Mülle ...
... and 2009. Policymakers in advanced countries agreed on pursuing a strongly expansionary stance—either via explicit discretionary stimulus measures, or by letting automatic stabilizers work to their full extent, disregarding the implied strong deterioration of fiscal deficits (see Corsetti and Mülle ...
ch04
... Investment and the Interest Rate • Long-term and short-term interest rates are different and do not always move in step – long-term interest rates are usually higher than short-term interest rates – the term premium is the premium in the interest rate that the market charges on long-term loans vis- ...
... Investment and the Interest Rate • Long-term and short-term interest rates are different and do not always move in step – long-term interest rates are usually higher than short-term interest rates – the term premium is the premium in the interest rate that the market charges on long-term loans vis- ...
View/Open
... farmers under customary tenure in countries like Benin. Therefore, the land used for the first unit of cassava usually bears very low opportunity cost. In addition, since cassava can grow to satisfactory level with very little input, initial marginal productivity of land as well as labor at q = 0 ca ...
... farmers under customary tenure in countries like Benin. Therefore, the land used for the first unit of cassava usually bears very low opportunity cost. In addition, since cassava can grow to satisfactory level with very little input, initial marginal productivity of land as well as labor at q = 0 ca ...
International Trade Finance and the Cost Channel of Monetary
... On the theoretical front, several explanations for this phenomenon have been explored in the literature. The most common explanation hinges on the fact that international shipments take more time than domestic shipments (both travel time and time taken for documentation and clearances),4 which impli ...
... On the theoretical front, several explanations for this phenomenon have been explored in the literature. The most common explanation hinges on the fact that international shipments take more time than domestic shipments (both travel time and time taken for documentation and clearances),4 which impli ...
Chapter 29
... quantity of real GDP demanded and the price level when all other influences on expenditure plans remain the same. Other things remaining the same, • When the price level rises, the quantity of real GDP demanded decreases. • When the price level falls, the quantity of real GDP demanded increases. © 2 ...
... quantity of real GDP demanded and the price level when all other influences on expenditure plans remain the same. Other things remaining the same, • When the price level rises, the quantity of real GDP demanded decreases. • When the price level falls, the quantity of real GDP demanded increases. © 2 ...
Estimation of Money Demand Function for Selected
... Figure 26. Real GDP in Canada ....................................................................................... 23 Figure 27. Real GDP in Hungary ..................................................................................... 24 Figure 28. Real GDP in Iceland ............................ ...
... Figure 26. Real GDP in Canada ....................................................................................... 23 Figure 27. Real GDP in Hungary ..................................................................................... 24 Figure 28. Real GDP in Iceland ............................ ...
View/Open
... larger taxation of agrifood sector than it really is. This situation often takes place at the early stage of transition. When national currency is overvalued PSE shows greater support. In the Soviet economy rouble was overvalued. At the beginning of transitional stage it was undervalued due to the s ...
... larger taxation of agrifood sector than it really is. This situation often takes place at the early stage of transition. When national currency is overvalued PSE shows greater support. In the Soviet economy rouble was overvalued. At the beginning of transitional stage it was undervalued due to the s ...
NBER WORKING PAPER SERIES IS THE U.S. CURRENT ACCOUNT DEFICIT
... “The United States is the only major country proclaiming itself indifferent to its currency value. In countries running persistent current account deficits, governments normally -- indeed must – reduce domestic consumption. But so far, the United States has relied on other countries to adjust their ...
... “The United States is the only major country proclaiming itself indifferent to its currency value. In countries running persistent current account deficits, governments normally -- indeed must – reduce domestic consumption. But so far, the United States has relied on other countries to adjust their ...
Arbitrage in the foreign exchange market
... short-term arbitrage opportunities to arise, inviting traders to exploit them, and hence be quickly eliminated. Also, microstructure theory shows how price differences may occur for identical assets in markets that are less than fully centralized, segmented or with an imperfect degree of transparenc ...
... short-term arbitrage opportunities to arise, inviting traders to exploit them, and hence be quickly eliminated. Also, microstructure theory shows how price differences may occur for identical assets in markets that are less than fully centralized, segmented or with an imperfect degree of transparenc ...
Abstract - NYU Stern
... fallen following the bust of the IT bubble, the US current account deficit has kept on growing and was equal to about 5% of GDP in 2002. So while one could have argued that the current account deficit of the 1990s was “good” as it was driven by an investment boom (whose share in GDP rose by 5% in th ...
... fallen following the bust of the IT bubble, the US current account deficit has kept on growing and was equal to about 5% of GDP in 2002. So while one could have argued that the current account deficit of the 1990s was “good” as it was driven by an investment boom (whose share in GDP rose by 5% in th ...
inflation modeling for the sudan 1970-2002
... levels had been resorted almost everywhere. In 1930’s,the great depression spread over to many countries. Most of the industrial countries experienced declining prices and the cost of living decreased substantially. With World war II, inflation reappeared and spread quickly throughout trading nation ...
... levels had been resorted almost everywhere. In 1930’s,the great depression spread over to many countries. Most of the industrial countries experienced declining prices and the cost of living decreased substantially. With World war II, inflation reappeared and spread quickly throughout trading nation ...
Aggregate Supply and Demand
... makes households feel wealthier, C rises, the AD curve shifts right. ...
... makes households feel wealthier, C rises, the AD curve shifts right. ...
1 The Fundamental Determinants of International Competitiveness
... for African countries most of which are small open economies aiming to provide their citizens with opportunities to improve their living standards and quality of life through employment and productivity gains2 (Ramirez and Tsangarides, 2007). This study aims to use an appropriate framework and suita ...
... for African countries most of which are small open economies aiming to provide their citizens with opportunities to improve their living standards and quality of life through employment and productivity gains2 (Ramirez and Tsangarides, 2007). This study aims to use an appropriate framework and suita ...
Objectives for Chapter 23: The Basic Theory of Monetarism Chapter
... addition to the price level and the Real GDP, the demand for money also depends on real interest rates. Money pays less interest than any other form of saving. Assume that there are only two forms of holding wealth: checking accounts and Treasury Bills. Checking accounts pay 1% interest. If Treasury ...
... addition to the price level and the Real GDP, the demand for money also depends on real interest rates. Money pays less interest than any other form of saving. Assume that there are only two forms of holding wealth: checking accounts and Treasury Bills. Checking accounts pay 1% interest. If Treasury ...
PDF file
... This analysis will allow us to focus on central episodes in the previous decade and decompose the factors that affected the economy during these periods. Among these episodes are the inßux of immigrants, especially in the early 1990s, the ending of the inßux in the second half of the decade, the emer ...
... This analysis will allow us to focus on central episodes in the previous decade and decompose the factors that affected the economy during these periods. Among these episodes are the inßux of immigrants, especially in the early 1990s, the ending of the inßux in the second half of the decade, the emer ...
CAPITAL FLOWS AND THEIR IMPLICATION FOR CENTRAL BANK
... injection into the economy, which can contribute inflation. Furthermore recent years’ real exchange rate appreciation is effected through higher inflation in Mongolia. In fact, the increase in the reserve money in Mongolia has been largely driven by an increase in net international reserves (NIR) be ...
... injection into the economy, which can contribute inflation. Furthermore recent years’ real exchange rate appreciation is effected through higher inflation in Mongolia. In fact, the increase in the reserve money in Mongolia has been largely driven by an increase in net international reserves (NIR) be ...
The Coming U.S. Interest Rate Tightening Cycle: Smooth Sailing or
... Baseline: a smooth tightening cycle. There are multiple reasons to expect a smooth tightening cycle with only modest impact on EFEs: ...
... Baseline: a smooth tightening cycle. There are multiple reasons to expect a smooth tightening cycle with only modest impact on EFEs: ...
IMF World Economic Outlook, May 1998-
... scale.80 A banking crisis may be so extensive as to assume systemic proportions. Systemic financial crises are potentially severe disruptions of financial markets that, by impairing markets’ ability to function effectively, can have large adverse effects on the real economy. A systemic financial cri ...
... scale.80 A banking crisis may be so extensive as to assume systemic proportions. Systemic financial crises are potentially severe disruptions of financial markets that, by impairing markets’ ability to function effectively, can have large adverse effects on the real economy. A systemic financial cri ...
Chapter 15 Inflation A Monetary Phenomenon
... elect to cover the appendix (Money Creation and Monetary Policy), another session or two will be required. In defining inflation, it is important that students understand that inflation is a continuing, or long-run, phenomenon. Once-and-for-all increases in the price level are excluded because no po ...
... elect to cover the appendix (Money Creation and Monetary Policy), another session or two will be required. In defining inflation, it is important that students understand that inflation is a continuing, or long-run, phenomenon. Once-and-for-all increases in the price level are excluded because no po ...
Estimates of Fundamental Equilibrium Exchange Rates, May 2016
... percent from the floor of 0 to 0.25 percent, where it had stood for the past seven years (Federal Reserve 2016b). Instead of rising, however, the dollar has fallen from an average of 1.073 per euro in November 2015 to 1.134 in April 2016, and from 122.6 yen per dollar to 109.6 over the same period.3 ...
... percent from the floor of 0 to 0.25 percent, where it had stood for the past seven years (Federal Reserve 2016b). Instead of rising, however, the dollar has fallen from an average of 1.073 per euro in November 2015 to 1.134 in April 2016, and from 122.6 yen per dollar to 109.6 over the same period.3 ...
Sectoral Asymmetries in a Small Open Economy September 2014
... markets are prone to paying a (risk) premium over the world interest rate in their borrowing contracts. The interaction of this premium (the country spread) with other factors such as the fundamentals of the economy and world interest rates introduces a strong propagation mechanism. Moreover, a simp ...
... markets are prone to paying a (risk) premium over the world interest rate in their borrowing contracts. The interaction of this premium (the country spread) with other factors such as the fundamentals of the economy and world interest rates introduces a strong propagation mechanism. Moreover, a simp ...
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.