debt valuation effects when there is foreign currency denominated
... fiscal policy. This is important, for instance, to poor countries. Most of the public debt of these countries is dollar-denominated. A devaluation not only increases the debt ratios. It will most likely also affect the interest rate that the country can negotiate on international markets, hence incr ...
... fiscal policy. This is important, for instance, to poor countries. Most of the public debt of these countries is dollar-denominated. A devaluation not only increases the debt ratios. It will most likely also affect the interest rate that the country can negotiate on international markets, hence incr ...
Chap009
... Estimate future dividends in the foreseeable future. Estimate the future stock price when the stock becomes a Constant Growth Stock (case 2). Compute the total present value of the estimated future dividends and future stock price at the appropriate discount rate. ...
... Estimate future dividends in the foreseeable future. Estimate the future stock price when the stock becomes a Constant Growth Stock (case 2). Compute the total present value of the estimated future dividends and future stock price at the appropriate discount rate. ...
ECON00 Chapter 3
... money – inflation reduces purchasing power of people with fixed (unchanged dollar) income or savings – nominal interest rate observed interest rate; dollars per year in interest as percentage of dollars saved – realized real interest rate is nominal interest rate adjusted for inflation = nominal int ...
... money – inflation reduces purchasing power of people with fixed (unchanged dollar) income or savings – nominal interest rate observed interest rate; dollars per year in interest as percentage of dollars saved – realized real interest rate is nominal interest rate adjusted for inflation = nominal int ...
NBER WORKING PAPER SERIES GOVERNMENT SPENDING, INTEREST RATES, PRICES, AND BUDGET DEFICITS
... increase in real interest rates applies as well to the case of public investment, which may substitute imperfectly for private investment. The basic idea is that a higher real interest rate is the appropriate price signal when the government's demand for goods is temporarily high.1 This signal motiv ...
... increase in real interest rates applies as well to the case of public investment, which may substitute imperfectly for private investment. The basic idea is that a higher real interest rate is the appropriate price signal when the government's demand for goods is temporarily high.1 This signal motiv ...
Finding the Equilibrium Real Interest Rate in a Fog of Policy
... member of the Congressional Budget Office’s Panel of Economic Advisers from 1995 to 2001. From 2001 to 2005, he served as undersecretary of the Treasury for international affairs where he was responsible for currency markets, international development, for oversight of the International Monetary Fun ...
... member of the Congressional Budget Office’s Panel of Economic Advisers from 1995 to 2001. From 2001 to 2005, he served as undersecretary of the Treasury for international affairs where he was responsible for currency markets, international development, for oversight of the International Monetary Fun ...
AD/AS - PBworks
... • In the long run, the aggregate-supply curve is vertical because the price level does not affect long run determinants of real GDP. • In the short run, the aggregate-supply curve is ...
... • In the long run, the aggregate-supply curve is vertical because the price level does not affect long run determinants of real GDP. • In the short run, the aggregate-supply curve is ...
NBER WORKING PAPER SERIES DEFLATION AND MONETARY POLICY IN TAIWAN Ya-Hwei Yang
... immune from the attack of the East Asian financial crisis in 1997-1998, performing better in terms of its economic growth rate, unemployment rate, currency depreciation and falling stock prices than its East Asian neighbors. As Table 1 shows, however, Taiwan’s economic performance since 1999 has nev ...
... immune from the attack of the East Asian financial crisis in 1997-1998, performing better in terms of its economic growth rate, unemployment rate, currency depreciation and falling stock prices than its East Asian neighbors. As Table 1 shows, however, Taiwan’s economic performance since 1999 has nev ...
Homework #2
... increased by the same amount over time. The price of fish increased by 28.6% (((9-7)/7)*100), while the price of pork decreased by 25% (((68)/8)*100) and the price of beef increased by 50% (((15-10)/10)*100). Inflation would be different if the market basket contained only beef, then if the market b ...
... increased by the same amount over time. The price of fish increased by 28.6% (((9-7)/7)*100), while the price of pork decreased by 25% (((68)/8)*100) and the price of beef increased by 50% (((15-10)/10)*100). Inflation would be different if the market basket contained only beef, then if the market b ...
essential facts about inflation.p65
... Box 4 Why does the BOJ Intervene in the Foreign Exchange Market? The Bank of Jamaica intervenes in the foreign exchange market in order to eliminate excess demand for or excess supply of foreign exchange. In doing so, the Bank seeks to avoid rapid appreciation or depreciation in the market-determin ...
... Box 4 Why does the BOJ Intervene in the Foreign Exchange Market? The Bank of Jamaica intervenes in the foreign exchange market in order to eliminate excess demand for or excess supply of foreign exchange. In doing so, the Bank seeks to avoid rapid appreciation or depreciation in the market-determin ...
Going Global: Transition from Plan to Market in the World Economy
... qualify. The Indian economy has long been marked by public ownership of much industry and a Kafkaesque network of regulatory controls on private decisions relating to investment, production, and trade. Also, the Indian rupee was not convertible on current or capital account. The economy had, in effe ...
... qualify. The Indian economy has long been marked by public ownership of much industry and a Kafkaesque network of regulatory controls on private decisions relating to investment, production, and trade. Also, the Indian rupee was not convertible on current or capital account. The economy had, in effe ...
Regulation of Non-U.S. Exchanges` Marketing Efforts in
... In addition, the “Due Process” clause under the 14th Amendment of the U.S. Constitution puts limits on the jurisdiction of the federal government and the states over the activities of foreign persons. See International Shoe Co. v. State of Washington, 66 S. Ct. 154 (1945); McGee v. International Lif ...
... In addition, the “Due Process” clause under the 14th Amendment of the U.S. Constitution puts limits on the jurisdiction of the federal government and the states over the activities of foreign persons. See International Shoe Co. v. State of Washington, 66 S. Ct. 154 (1945); McGee v. International Lif ...
Chapter 16 Money in macroeconomics
... through the gold standard. And under the Bretton-Woods agreement, 194771, the currencies of the developed Western countries outside the United States were convertible into US dollars at a fixed exchange rate (or rather an exchange rate which is adjustable only under specific circumstances); and US d ...
... through the gold standard. And under the Bretton-Woods agreement, 194771, the currencies of the developed Western countries outside the United States were convertible into US dollars at a fixed exchange rate (or rather an exchange rate which is adjustable only under specific circumstances); and US d ...
Weak rupee: Is it good, or is it bad for the economy?
... The Indian rupee was under great stress in 2013 as overseas investors are paring their exposure to Asia’s third-largest economy amid international uncertainty and mounting worries over the domestic economy. Due to stagnant reforms, and declining foreign investment, rupee started depreciating in the ...
... The Indian rupee was under great stress in 2013 as overseas investors are paring their exposure to Asia’s third-largest economy amid international uncertainty and mounting worries over the domestic economy. Due to stagnant reforms, and declining foreign investment, rupee started depreciating in the ...
Inflation-Linked Pricing in the Presence of a Central Bank Reaction
... Gabriele Sarais Department of Mathematics ...
... Gabriele Sarais Department of Mathematics ...
Real Interest Rate
... a. New entrants into the labor force have trouble finding jobs. b. Workers leave their current jobs to find better jobs. c. Workers are laid off because AD has declined. d. Workers are fired because their skills are no longer in demand. (52%) 15. In the country of Agronomia, banks charge 10% interes ...
... a. New entrants into the labor force have trouble finding jobs. b. Workers leave their current jobs to find better jobs. c. Workers are laid off because AD has declined. d. Workers are fired because their skills are no longer in demand. (52%) 15. In the country of Agronomia, banks charge 10% interes ...
Brazil: Recent Macroeconomic and Financial Developments
... Recent Initiatives to Inject Liquidity in Foreign Currency Market • Sales of USD in repurchase agreement auctions; • Reduction of reserve requirements for banks acquiring USD with repurchase agreement; ...
... Recent Initiatives to Inject Liquidity in Foreign Currency Market • Sales of USD in repurchase agreement auctions; • Reduction of reserve requirements for banks acquiring USD with repurchase agreement; ...
Treasury Bill Rates in the 1970s and 1980s
... Wilcox (1983). The tax rate used for the October observation is an average of the rate for the Current year and the subsequent year. We use full-employment government purchases and net taxes as our fiscal policy proxies for two reasons. First, separate variables for purchases and for taxes-net-of-tr ...
... Wilcox (1983). The tax rate used for the October observation is an average of the rate for the Current year and the subsequent year. We use full-employment government purchases and net taxes as our fiscal policy proxies for two reasons. First, separate variables for purchases and for taxes-net-of-tr ...
Why foreign savings fail to cause growth - Bresser
... financed either by loans or by foreign direct investments, will not usually increase the rate of capital accumulation or will have little impact on it in so far as current account deficits will be associated with appreciated exchange rates, artificially increased real wages and salaries and high con ...
... financed either by loans or by foreign direct investments, will not usually increase the rate of capital accumulation or will have little impact on it in so far as current account deficits will be associated with appreciated exchange rates, artificially increased real wages and salaries and high con ...
Fiscal (and External) Sustainability
... The ‘missundertood’ solvency requirement truncates the sum in (20) at a terminal T —requiring that the public debt be completely paid off by then. 2. Government Debt in an Open Economy So far we haven’t been too specific about what exactly is the interest rate, i. We think of i as an effective inte ...
... The ‘missundertood’ solvency requirement truncates the sum in (20) at a terminal T —requiring that the public debt be completely paid off by then. 2. Government Debt in an Open Economy So far we haven’t been too specific about what exactly is the interest rate, i. We think of i as an effective inte ...
World Economic Outlook, October 2015, Chapter 3: Exchange Rates
... currency and increase the prices of imports in domestic currency, which will lead to more exports and less imports.8 These theoretical predictions guide the statistical analysis in this chapter. This section starts by examining the historical evidence on the connection between exchange rates, trade ...
... currency and increase the prices of imports in domestic currency, which will lead to more exports and less imports.8 These theoretical predictions guide the statistical analysis in this chapter. This section starts by examining the historical evidence on the connection between exchange rates, trade ...
Introductory Macroeconomics - General Guide To Personal and
... can be thought of as persisting for some time, perhaps a number of months or years. In the long run, the labour and goods markets have fully adjusted. This does not necessarily in general mean that the outcome is Pareto-efficient, because this will still depend upon the correct long run supply side ...
... can be thought of as persisting for some time, perhaps a number of months or years. In the long run, the labour and goods markets have fully adjusted. This does not necessarily in general mean that the outcome is Pareto-efficient, because this will still depend upon the correct long run supply side ...
Macro 2.3- Inflation
... Why does printing money lead to inflation? •Assume the velocity is relatively constant because people's spending habits are not quick to change. •Also assume that output (Y) is not affected by the amount of money because it is based on production, not the value of the stuff produced. If the govenmen ...
... Why does printing money lead to inflation? •Assume the velocity is relatively constant because people's spending habits are not quick to change. •Also assume that output (Y) is not affected by the amount of money because it is based on production, not the value of the stuff produced. If the govenmen ...
NBER WORKING PAPER SERIES CYCLES Michael B. Devereux
... disagreement between theory and data, and then provide an extension of the standard framework to account for empirical regularities. In particular, we extend a standard two-sector international business cycle model to allow for …rm heterogeneity and an extensive margin in sectoral reallocations. Thi ...
... disagreement between theory and data, and then provide an extension of the standard framework to account for empirical regularities. In particular, we extend a standard two-sector international business cycle model to allow for …rm heterogeneity and an extensive margin in sectoral reallocations. Thi ...
Diapositive 1
... • I will have to split the analysis into two models, which were previously built, each with three countries: • The first one contains the USA, on a flexible exchange rate with Europe, itself divided into two countries. • The second model has the USA, on a fixed exchange rate with China, with Europe ...
... • I will have to split the analysis into two models, which were previously built, each with three countries: • The first one contains the USA, on a flexible exchange rate with Europe, itself divided into two countries. • The second model has the USA, on a fixed exchange rate with China, with Europe ...
Exchange rate
.jpg?width=300)
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.