NBER WORKING PAPER SERIES THE UNSUSTAINABLE US CURRENT ACCOUNT POSITION REVISITED
... et al., 2004a, b) that the current Asian exchange rate pegs constitute a Bretton Woods II system. Perhaps, but that analysis applies more readily to China than Japan, which accounts for a much bigger share of global current account surpluses. Even for China, current evidence suggests that more marke ...
... et al., 2004a, b) that the current Asian exchange rate pegs constitute a Bretton Woods II system. Perhaps, but that analysis applies more readily to China than Japan, which accounts for a much bigger share of global current account surpluses. Even for China, current evidence suggests that more marke ...
Inflation Report February 2005
... Money and asset prices The economics of low long-term bond yields ...
... Money and asset prices The economics of low long-term bond yields ...
China has achieved extraordinary economic growth over the past
... average 15 percent annual rate. During the same period, China has also made substantial progress in transforming its exchange control regime into a market-based system. In 1994, it unified the prior dual exchange rate system and established a nation-wide interbank market for foreign exchange. The un ...
... average 15 percent annual rate. During the same period, China has also made substantial progress in transforming its exchange control regime into a market-based system. In 1994, it unified the prior dual exchange rate system and established a nation-wide interbank market for foreign exchange. The un ...
Economic Indicators
... environment of increased aversion to risk, investor selectivity and discrimination against markets featuring weak fundamentals will remain of primary importance for at least until global conditions stabilize. Turkey’s ...
... environment of increased aversion to risk, investor selectivity and discrimination against markets featuring weak fundamentals will remain of primary importance for at least until global conditions stabilize. Turkey’s ...
1 - BrainMass
... a) Suppose that the nominal money supply has long been constant at M = 4000 and is expected by the public to remain constant forever. What are the equilibrium values of the price level P, the expected price level P^e, expected inflation π^e, output Y, and the unemployment rate u? b) A totally unexpe ...
... a) Suppose that the nominal money supply has long been constant at M = 4000 and is expected by the public to remain constant forever. What are the equilibrium values of the price level P, the expected price level P^e, expected inflation π^e, output Y, and the unemployment rate u? b) A totally unexpe ...
Understanding the World Economy Final Exam – Indicative answers
... A) According to PPP, the Korean Won is overvalued with respect to the US dollar. B) According to PPP, the British Pound is overvalued with respect to the US dollar. C) PPP would be verified if a Big Mac in China would cost approximately 25 Yuans. D) PPP almost holds between China and Korea. 22. Acco ...
... A) According to PPP, the Korean Won is overvalued with respect to the US dollar. B) According to PPP, the British Pound is overvalued with respect to the US dollar. C) PPP would be verified if a Big Mac in China would cost approximately 25 Yuans. D) PPP almost holds between China and Korea. 22. Acco ...
The Role of Currency Board Regime during Economic Crisis
... Fatas and Rose (2001) add that fixed exchange rate regime is associated with stricter fiscal policy because of the credibility role of economic policy. Since many exchange rate devaluations are associated with fiscal deficit and severe problems of credibility for government and Central Banks, tighte ...
... Fatas and Rose (2001) add that fixed exchange rate regime is associated with stricter fiscal policy because of the credibility role of economic policy. Since many exchange rate devaluations are associated with fiscal deficit and severe problems of credibility for government and Central Banks, tighte ...
Chap023
... Risk with Options • “Commodity” options are generally futures options • Exercising a call – Owner of the call receives a long position in the futures contract plus cash equal to the difference between the exercise price and the futures price – Seller of the call receives a short position in the futu ...
... Risk with Options • “Commodity” options are generally futures options • Exercising a call – Owner of the call receives a long position in the futures contract plus cash equal to the difference between the exercise price and the futures price – Seller of the call receives a short position in the futu ...
Exchange rate overshooting and the costs of floating
... 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 ...
Colombian Purchasing Power Parity Analysed Using a Framework
... exchange was created, where the exchange rate was freely determined.15 However, the Banco de la República continued to intervene in the market, and in practice the new exchange rate regime was a managed floating regime with many similarities to a crawling exchange rate band. In January 1994, the ce ...
... exchange was created, where the exchange rate was freely determined.15 However, the Banco de la República continued to intervene in the market, and in practice the new exchange rate regime was a managed floating regime with many similarities to a crawling exchange rate band. In January 1994, the ce ...
The euro in the currency war - Conseil d`Analyse Economique
... Exchange rate policy and monetary policy are intimately linked since they both involve controlling the value of a currency. Exchange rate policy aims to control the external value of the currency (in relation to other currencies), whilst monetary policy focuses on its internal value (its local purch ...
... Exchange rate policy and monetary policy are intimately linked since they both involve controlling the value of a currency. Exchange rate policy aims to control the external value of the currency (in relation to other currencies), whilst monetary policy focuses on its internal value (its local purch ...
Answer: The same starting position as in the closed
... suppose that the home country operates a fixed exchange rate. Moreover, everything else remaining unchanged, investments in the home country become less risky. As a consequence, the risk premium of making loans to the home country falls. For the home country the effect of the decreasing risk premium ...
... suppose that the home country operates a fixed exchange rate. Moreover, everything else remaining unchanged, investments in the home country become less risky. As a consequence, the risk premium of making loans to the home country falls. For the home country the effect of the decreasing risk premium ...
Coping with Asia`s Large Capital Inflows in a Multi
... of a 2004 article (“This Time It’s Not Different,” Newsweek Internl., 2/16/04). where it referred specifically to the underestimation of risk by investors going into Emerging Markets, as reflected in low spreads. ...
... of a 2004 article (“This Time It’s Not Different,” Newsweek Internl., 2/16/04). where it referred specifically to the underestimation of risk by investors going into Emerging Markets, as reflected in low spreads. ...
Econ152 Introduction to Macroeconomics Instructor: Leo
... 7) If real GDP increases over time, the cost of living will A) either remain constant or increase. B) always decrease. C) always remain constant. D) always increase. E) More information is needed to determine how the cost of living changes. 8) Which of the following is true? A) If people expect the ...
... 7) If real GDP increases over time, the cost of living will A) either remain constant or increase. B) always decrease. C) always remain constant. D) always increase. E) More information is needed to determine how the cost of living changes. 8) Which of the following is true? A) If people expect the ...
Comment
... article stood the test of time, namely that a specific kind of political integration must go along with monetary integration, namely the formation of a consensus on the importance of price stability. This basic idea was 25 years later one of the key ingredients in Kathleen McNamara’s explanation for ...
... article stood the test of time, namely that a specific kind of political integration must go along with monetary integration, namely the formation of a consensus on the importance of price stability. This basic idea was 25 years later one of the key ingredients in Kathleen McNamara’s explanation for ...
PPT
... deciding how much reserves to hold: their higher exposure to “bad” shocks (both real and financial, both domestic and external) and their limited ability to smooth the impact of these shocks on their balance of payments through world capital markets. ...
... deciding how much reserves to hold: their higher exposure to “bad” shocks (both real and financial, both domestic and external) and their limited ability to smooth the impact of these shocks on their balance of payments through world capital markets. ...
AP Macroeconomics Syllabus Course Description
... B. Balance of payments accounts 1. Balance of trade 2. Current account 3. Capital account C. Foreign exchange market 1. Demand for and supply of foreign exchange 2. Exchange rate determination 3. Currency appreciation and depreciation D. Net exports and capital flows E. Links to financial and goods ...
... B. Balance of payments accounts 1. Balance of trade 2. Current account 3. Capital account C. Foreign exchange market 1. Demand for and supply of foreign exchange 2. Exchange rate determination 3. Currency appreciation and depreciation D. Net exports and capital flows E. Links to financial and goods ...
Ratios and Unit Rates
... first item being compared is always the first number and the second item being compared is the second number of the ratio. Example: A recipe calls for 4 cups of cereal and 2 cups of pretzels. Write this as a ratio. ...
... first item being compared is always the first number and the second item being compared is the second number of the ratio. Example: A recipe calls for 4 cups of cereal and 2 cups of pretzels. Write this as a ratio. ...
Chapter 27: The International Financial Crises of the 1990s
... fixed exchange rates. You should review these now. We have already considered the advantages and disadvantages of freely floating vs. fixed exchange rates. The Bretton Woods system collapsed in 1973, as was described in Chapter 25. The system that followed it can be called a “managed float”. Basical ...
... fixed exchange rates. You should review these now. We have already considered the advantages and disadvantages of freely floating vs. fixed exchange rates. The Bretton Woods system collapsed in 1973, as was described in Chapter 25. The system that followed it can be called a “managed float”. Basical ...
Understanding the financial crisis in Asia Bhagwan Chowdhry , Amit Goyal
... that successfully defended its currency against speculative attacks and has maintained its parity with the U.S. dollar. The stock markets in all these countries in Asia plunged as the currency crisis engulfed most of East Asian countries.4 One of the biggest challenges facing scholars studying the E ...
... that successfully defended its currency against speculative attacks and has maintained its parity with the U.S. dollar. The stock markets in all these countries in Asia plunged as the currency crisis engulfed most of East Asian countries.4 One of the biggest challenges facing scholars studying the E ...
chapter 15 exchange-rate adjustments and the balance of payments
... Chapter 15: Exchange-Rate Adjustments and the Balance of Payments ...
... Chapter 15: Exchange-Rate Adjustments and the Balance of Payments ...
FedViews
... unemployment rate rises by 1 percentage point. This rule of thumb captures the broad contour of the actual target funds rate during late 2007 and 2008 when the Fed lowered its target by over 5 percentage points to essentially zero. In 2009 and 2010, as unemployment rose and inflation slowed, this ru ...
... unemployment rate rises by 1 percentage point. This rule of thumb captures the broad contour of the actual target funds rate during late 2007 and 2008 when the Fed lowered its target by over 5 percentage points to essentially zero. In 2009 and 2010, as unemployment rose and inflation slowed, this ru ...
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.