RELATIONSHIP BETWEEN MACROECONOMIC FUNDAMENTALS
... prices and real investment similarly, but the output from real investment doesn’t appear for some time after it is made. Third, changes in stock prices are changes in wealth, and this can affect the demand for consumption and investment goods” (Schwert, 1990, p. 1237). Chen, Roll and Ross (1986) pro ...
... prices and real investment similarly, but the output from real investment doesn’t appear for some time after it is made. Third, changes in stock prices are changes in wealth, and this can affect the demand for consumption and investment goods” (Schwert, 1990, p. 1237). Chen, Roll and Ross (1986) pro ...
Mankiw 6e PowerPoints - University of California, Davis
... bank follows a monetary policy rule that adjusts interest rates when output or inflation change. ...
... bank follows a monetary policy rule that adjusts interest rates when output or inflation change. ...
WPS2398 - World bank documents
... foreign real interest rates, slowdown in the growth rate of industrial countries, and the secular decline in the terms of trade) as well as domestic factors (as represented by increasing fiscal deficits and real exchange rate appreciation) were relevant in explaining the deterioration of the current ...
... foreign real interest rates, slowdown in the growth rate of industrial countries, and the secular decline in the terms of trade) as well as domestic factors (as represented by increasing fiscal deficits and real exchange rate appreciation) were relevant in explaining the deterioration of the current ...
capr 1+) New Ke,Jne5Ian conomIcs: SticL,9 PrIces
... firms to fix the prices for their products for long periods of time. Consider a restaurant, which must print new menus whenever it changes its prices. Printing menus is costly, and this causes the restaurant to change prices infrequently. Given that prices change infrequently, there may be periods w ...
... firms to fix the prices for their products for long periods of time. Consider a restaurant, which must print new menus whenever it changes its prices. Printing menus is costly, and this causes the restaurant to change prices infrequently. Given that prices change infrequently, there may be periods w ...
Optimum Currency Area Theory and EMU
... Figure 4:1 Labour Mobility in Europe and the USA ............................................................... 30 Figure 4:1b Labour Mobility Criterion: US vs. the EMU ....................................................... 30 Figure 4:2 Impact of Crisis on Distribution of Mobile Workers ......... ...
... Figure 4:1 Labour Mobility in Europe and the USA ............................................................... 30 Figure 4:1b Labour Mobility Criterion: US vs. the EMU ....................................................... 30 Figure 4:2 Impact of Crisis on Distribution of Mobile Workers ......... ...
More details
... similar to a tax imposed in money keepers, and the nominated interest rate is a sum of actual interest rate and inflation rate, therefore, inflation makes people less willing to keep money and the monetary demand decreases. This leads to more regular bank withdraws. Economists have provided the term ...
... similar to a tax imposed in money keepers, and the nominated interest rate is a sum of actual interest rate and inflation rate, therefore, inflation makes people less willing to keep money and the monetary demand decreases. This leads to more regular bank withdraws. Economists have provided the term ...
macroeconomic policy - Faculty of Business and Economics Courses
... sales is permanent or transitory. So, it may prefer to wait and see whether this higher demand will continue into future. Secondly, producers work on explicit or implicit contracts with their customers. Explicit contracts are written contracts, whereas implicit contracts are unwritten contracts base ...
... sales is permanent or transitory. So, it may prefer to wait and see whether this higher demand will continue into future. Secondly, producers work on explicit or implicit contracts with their customers. Explicit contracts are written contracts, whereas implicit contracts are unwritten contracts base ...
S2000005_en.pdf
... policy targets. In section B we develop the case with an open capital account, where the conclusions are that inconsistent policy targets generate external vulnerability rather than inflation, and that private expenditure crowds out fiscal policy. Moreover, in the context of consistent targets, fisc ...
... policy targets. In section B we develop the case with an open capital account, where the conclusions are that inconsistent policy targets generate external vulnerability rather than inflation, and that private expenditure crowds out fiscal policy. Moreover, in the context of consistent targets, fisc ...
Why and when to introduce a single currency in ECOWAS
... • In today’s international monetary context, a single currency in ECOWAS will offer West African countries the opportunity to pool their monetary resources in order to pursue their common and individual objectives. In fact, the member countries of ECOWAS have serious externally-induced monetary prob ...
... • In today’s international monetary context, a single currency in ECOWAS will offer West African countries the opportunity to pool their monetary resources in order to pursue their common and individual objectives. In fact, the member countries of ECOWAS have serious externally-induced monetary prob ...
Trade Effect of a Single Currency in East Africa
... Kenya, Tanzania and Uganda have each adopted the export-led growth model as the main guide to national economic development and are implementing strategies for expanding their shares of the global export trade both in the traditional export destinations as well as regionally with each other. Strateg ...
... Kenya, Tanzania and Uganda have each adopted the export-led growth model as the main guide to national economic development and are implementing strategies for expanding their shares of the global export trade both in the traditional export destinations as well as regionally with each other. Strateg ...
China Africa ...17 juin
... world to secure the raw materials needed to sustain its high growth rate and to diversify its exports. This effort accelerated from 1999 when China adopted the “go out” policy. As part of this policy, China turned to Africa following the first China/Africa Cooperation Forum in 2000. Since then China ...
... world to secure the raw materials needed to sustain its high growth rate and to diversify its exports. This effort accelerated from 1999 when China adopted the “go out” policy. As part of this policy, China turned to Africa following the first China/Africa Cooperation Forum in 2000. Since then China ...
NBER WORKING PAPER SERIES ARE CHINESE TRADE FLOWS DIFFERENT? Yin-Wong Cheung
... steep drop off during the recession, and then a resumption of the trade surplus. Also, note that after 2003, the RMB real exchange rate moves together with China’s trade surplus. Note over this period, there are a number of other important events, including the unification of separate exchange rates ...
... steep drop off during the recession, and then a resumption of the trade surplus. Also, note that after 2003, the RMB real exchange rate moves together with China’s trade surplus. Note over this period, there are a number of other important events, including the unification of separate exchange rates ...
Inflation & unemployment
... by increasing the quantity of money, a process of cost-push inflation continues. © 2010 Pearson Addison-Wesley ...
... by increasing the quantity of money, a process of cost-push inflation continues. © 2010 Pearson Addison-Wesley ...
T S I
... has pursued an explicit inflation target. Then inflation risk premia and longer-term inflation expectations are inferred and analysed. The purpose of this paper is to incorporate the term structure of interest rates into a traditional Keynesian model (TKM), namely the Svensson (1997a) inflation fore ...
... has pursued an explicit inflation target. Then inflation risk premia and longer-term inflation expectations are inferred and analysed. The purpose of this paper is to incorporate the term structure of interest rates into a traditional Keynesian model (TKM), namely the Svensson (1997a) inflation fore ...
Effects of changes in the official interest rate in an inflation
... The positive response coefficients, β and γ, reflect the sensitivity of inflation and output, respectively, to changes in interest rate. If inflation is very sensitive to interest rate then, ceteris paribus, β will be small; similarly, if output is very sensitive to interest rate then, ceteris parib ...
... The positive response coefficients, β and γ, reflect the sensitivity of inflation and output, respectively, to changes in interest rate. If inflation is very sensitive to interest rate then, ceteris paribus, β will be small; similarly, if output is very sensitive to interest rate then, ceteris parib ...
DP2008/17 Does natural rate variation matter? Evidence from New Zealand Michael Kirker
... New Keynesian models are a popular tool for monetary policy advice. Typically, these models are estimated on demeaned interest rate and inflation data, implicitly assuming a constant natural real rate of interest and inflation target. However, if these concepts in fact vary over time, working with d ...
... New Keynesian models are a popular tool for monetary policy advice. Typically, these models are estimated on demeaned interest rate and inflation data, implicitly assuming a constant natural real rate of interest and inflation target. However, if these concepts in fact vary over time, working with d ...
Chapter 17 - Faculty of Business and Economics Courses
... the same manner as an ordinary demand curve If the price of product falls, the consumer’s real income rises increasing the amount consumed for a normal good (income effect) The lower price induces consumers to purchase more of product because it’s cheaper (substitution ...
... the same manner as an ordinary demand curve If the price of product falls, the consumer’s real income rises increasing the amount consumed for a normal good (income effect) The lower price induces consumers to purchase more of product because it’s cheaper (substitution ...
Notes Inflation and Interest Rates in the Medium Run
... Donald Kohn, his influential vice-chairman, and their professional staff, is that monetary policy affects inflation via its impact on the real economy. Higher interest rates reduce demand relative to the economy’s potential to supply goods and services. Reduce it enough, and unused slack will accumu ...
... Donald Kohn, his influential vice-chairman, and their professional staff, is that monetary policy affects inflation via its impact on the real economy. Higher interest rates reduce demand relative to the economy’s potential to supply goods and services. Reduce it enough, and unused slack will accumu ...
Benefits and Spillovers of Greater Competition in Europe
... shocks affecting marginal costs, even though such flexibility entails large adjustment costs. Instead, if price setters have strong monopoly power (θ is close to one, its minimum value), they can charge a high average markup over marginal costs. In this case, when marginal costs increase due to cycl ...
... shocks affecting marginal costs, even though such flexibility entails large adjustment costs. Instead, if price setters have strong monopoly power (θ is close to one, its minimum value), they can charge a high average markup over marginal costs. In this case, when marginal costs increase due to cycl ...
Optimal Monetary and Fiscal Policy at the Zero Lower Bound in a
... exchange rate depreciation has a bigger effect on demand and prices. Therefore, as such a promise becomes more powerful, it becomes necessary to use less of it. Similar result holds for fiscal policy. Optimal policy at the ZLB is associated with current government spending that is higher than the fu ...
... exchange rate depreciation has a bigger effect on demand and prices. Therefore, as such a promise becomes more powerful, it becomes necessary to use less of it. Similar result holds for fiscal policy. Optimal policy at the ZLB is associated with current government spending that is higher than the fu ...
Exchange rate movements and firm value: Evidence from
... time-varying regression with orthogonalized market returns. Among the studies that compare the exposure of Eurozone and nonEurozone firms, Hutson and Stevenson (2010) find that ER exposure of Eurozone firms is significantly higher than that of non-Eurozone firms in the post-Euro period. However, aft ...
... time-varying regression with orthogonalized market returns. Among the studies that compare the exposure of Eurozone and nonEurozone firms, Hutson and Stevenson (2010) find that ER exposure of Eurozone firms is significantly higher than that of non-Eurozone firms in the post-Euro period. However, aft ...
Can Perpetual Learning Explain the Forward Premium
... relationship between the fundamentals and the exchange rate that would hold under rational expectations, they do not know the parameter values and must estimate them from observed data.7 In the model we analyze, the exchange rate st , under rational expectations, satisfies st+1 = bvt + ut+1 , where v ...
... relationship between the fundamentals and the exchange rate that would hold under rational expectations, they do not know the parameter values and must estimate them from observed data.7 In the model we analyze, the exchange rate st , under rational expectations, satisfies st+1 = bvt + ut+1 , where v ...
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.