The Determinants of Pakistan`s Trade Balance
... draw further inferences. The result of the bounds test indicates that there is a stable long-run relationship between the trade balance and income, money supply, and exchange rate variables. The estimated results show that exchange rate depreciation is positively related to the trade balance in the ...
... draw further inferences. The result of the bounds test indicates that there is a stable long-run relationship between the trade balance and income, money supply, and exchange rate variables. The estimated results show that exchange rate depreciation is positively related to the trade balance in the ...
ppt
... ω = 3.0%/year: the requirements of display are less in relative terms than in early eras, and both a long peace and a political order with the propertied firmly in control diminish the wedge ...
... ω = 3.0%/year: the requirements of display are less in relative terms than in early eras, and both a long peace and a political order with the propertied firmly in control diminish the wedge ...
Outline for NBER Argentina Project
... In the early 1990s Argentina was the darling of international capital markets and viewed by many as a model of reform for emerging markets. Early in his Presidency, Carlos Menem embarked on a bold set of economic policies, including the adoption of a currency board which pegged the Argentine peso to ...
... In the early 1990s Argentina was the darling of international capital markets and viewed by many as a model of reform for emerging markets. Early in his Presidency, Carlos Menem embarked on a bold set of economic policies, including the adoption of a currency board which pegged the Argentine peso to ...
Does it pay to defend – The dynamics of financial crises
... of rational investors with the central bank mechanically depleting its reserves in an unsuccessful attempt to defend the currency. These models thus analyze scenario (B) - no attack, stable exchange rate - vs. (A2a) - attack, unsuccessful defense, and subsequent devaluation. Second generation models ...
... of rational investors with the central bank mechanically depleting its reserves in an unsuccessful attempt to defend the currency. These models thus analyze scenario (B) - no attack, stable exchange rate - vs. (A2a) - attack, unsuccessful defense, and subsequent devaluation. Second generation models ...
20140501 Problem Set 6 Answers Draft
... ω = 3.0%/year: the requirements of display are less in relative terms than in early eras, and both a long peace and a political order with the propertied firmly in control diminish the wedge ...
... ω = 3.0%/year: the requirements of display are less in relative terms than in early eras, and both a long peace and a political order with the propertied firmly in control diminish the wedge ...
real exchange rate movements and export growth: nigeria, 1960-1990
... Thus, an import-prohibiting tariff structure (comprising mostly duties above 50%) was put in place. The civil war of the late 1 960s appears to have given further impetus to the protectionist tendencies, as an appreciation of the NER was deliberately permitted. Apart from its well known "spending ef ...
... Thus, an import-prohibiting tariff structure (comprising mostly duties above 50%) was put in place. The civil war of the late 1 960s appears to have given further impetus to the protectionist tendencies, as an appreciation of the NER was deliberately permitted. Apart from its well known "spending ef ...
Macroeconomics
... If GDP declines, most workers who are laid off become unemployed (and it becomes harder for people who are looking for work to find jobs). Because of the importance of hours reductions and the common pattern of retaining workers during temporary declines in demand (called labor hoarding), a 3 percen ...
... If GDP declines, most workers who are laid off become unemployed (and it becomes harder for people who are looking for work to find jobs). Because of the importance of hours reductions and the common pattern of retaining workers during temporary declines in demand (called labor hoarding), a 3 percen ...
NBER WORKING PAPER SERIES WELFARE ECONOMICS OF DEBT SERVICE Dani Rodrik Working Paper
... Dornbusch (1987) expresses the budget deficit in reduced form as an increasing function of the real exchange rate, arguing that "the real value of the service of an external debt contracted in dollars will increase when the As the discussion in the text shows, real exchange rate depreciates" (p. 68) ...
... Dornbusch (1987) expresses the budget deficit in reduced form as an increasing function of the real exchange rate, arguing that "the real value of the service of an external debt contracted in dollars will increase when the As the discussion in the text shows, real exchange rate depreciates" (p. 68) ...
28.1 money and the interest rate
... The Nominal Interest Rate The nominal interest rate adjusts to make the quantity of money demanded equal the quantity of money supplied. The supply of money is the relationship between the quantity of money supplied and the nominal interest rate. On any given day, the quantity of money is fixed. ...
... The Nominal Interest Rate The nominal interest rate adjusts to make the quantity of money demanded equal the quantity of money supplied. The supply of money is the relationship between the quantity of money supplied and the nominal interest rate. On any given day, the quantity of money is fixed. ...
File
... Savers are hurt when unexpected inflation _reduces___ returns on investment. If inflation is expected, then savers will be compensated with higher rates of return, which offsets the inflation effect. The higher rate reflects an inflation ...
... Savers are hurt when unexpected inflation _reduces___ returns on investment. If inflation is expected, then savers will be compensated with higher rates of return, which offsets the inflation effect. The higher rate reflects an inflation ...
Solutions to Assignment 2
... 100. This is what we expect to find, because the government-purchases multiplier is 1/(1 – MPC): because the MPC is 0.75, the government-purchases multiplier is 4. A level of income of 1,600 represents an increase of 300 over the original level of income. The government-purchases multiplier is 1/(1 ...
... 100. This is what we expect to find, because the government-purchases multiplier is 1/(1 – MPC): because the MPC is 0.75, the government-purchases multiplier is 4. A level of income of 1,600 represents an increase of 300 over the original level of income. The government-purchases multiplier is 1/(1 ...
Yen Bloc or Yuan Bloc
... region in the world. Most notably, China has been growing at an outstanding rate. Indeed, China has emerged as an important player in the regional and global economy, and the Chinese yuan has become a key subject of debate. While it is undeniable that Japan is still a dominant economy in East Asia, ...
... region in the world. Most notably, China has been growing at an outstanding rate. Indeed, China has emerged as an important player in the regional and global economy, and the Chinese yuan has become a key subject of debate. While it is undeniable that Japan is still a dominant economy in East Asia, ...
Practice Questions for Midterm Examination of Economics 1.Which
... b. In the long run, a higher saving rate leads to a higher growth rate of income. c. Returns to capital become increasingly smaller as the amount of capital per worker increases. d. All of the above are correct. 18.Suppose that there are diminishing returns to capital. Suppose also that two countrie ...
... b. In the long run, a higher saving rate leads to a higher growth rate of income. c. Returns to capital become increasingly smaller as the amount of capital per worker increases. d. All of the above are correct. 18.Suppose that there are diminishing returns to capital. Suppose also that two countrie ...
How and why do prices of identical products vary across countries?
... of identical goods and services are equal across countries. The purchasing power parity (PPP) supports this theory, however, it reflects the prices of basket of goods instead of individual goods in order for the LOP to hold. There is a lack of available research investigating the question of why do ...
... of identical goods and services are equal across countries. The purchasing power parity (PPP) supports this theory, however, it reflects the prices of basket of goods instead of individual goods in order for the LOP to hold. There is a lack of available research investigating the question of why do ...
Monetary Policy Strategy
... • Weak linkage between reserves and spending results in variation in demand for reserves not related to changes in spending • In this case, automatic changes in interest rates would not allow the Fed to stabilize the economy • Under these conditions, the Fed has concluded it is better to target the ...
... • Weak linkage between reserves and spending results in variation in demand for reserves not related to changes in spending • In this case, automatic changes in interest rates would not allow the Fed to stabilize the economy • Under these conditions, the Fed has concluded it is better to target the ...
Practice Questions for Midterm Examination of Economics
... b. In the long run, a higher saving rate leads to a higher growth rate of income. c. Returns to capital become increasingly smaller as the amount of capital per worker increases. d. All of the above are correct. 18.Suppose that there are diminishing returns to capital. Suppose also that two countrie ...
... b. In the long run, a higher saving rate leads to a higher growth rate of income. c. Returns to capital become increasingly smaller as the amount of capital per worker increases. d. All of the above are correct. 18.Suppose that there are diminishing returns to capital. Suppose also that two countrie ...
" For a closed economy, the national income identity is written as Y
... ing the demand (either through a …scal or monetary policy). This brings output to its previous level, but the prices are permanently higher. A note on Monetary Policy: The increase in demand that we see on the right graph in the previous slide can be caused by an increase in the money supply by Cent ...
... ing the demand (either through a …scal or monetary policy). This brings output to its previous level, but the prices are permanently higher. A note on Monetary Policy: The increase in demand that we see on the right graph in the previous slide can be caused by an increase in the money supply by Cent ...
on futures contracts
... Account • Initial Margin: funds that must be deposited in a margin account to provide capital to absorb losses • Marking to Market: each day the profits or losses are realized and reflected in the margin account. • Maintenance or variance margin: an established value below which a trader’s margin ma ...
... Account • Initial Margin: funds that must be deposited in a margin account to provide capital to absorb losses • Marking to Market: each day the profits or losses are realized and reflected in the margin account. • Maintenance or variance margin: an established value below which a trader’s margin ma ...
Monetary Policy Objectives and Framework
... Although the Fed can change the federal funds rate by any (reasonable) amount that it chooses, it normally changes the rate by only a quarter of a percentage point. How does the Fed decide the appropriate level for the federal funds rate? And how, having made that decision, does the Fed get the fede ...
... Although the Fed can change the federal funds rate by any (reasonable) amount that it chooses, it normally changes the rate by only a quarter of a percentage point. How does the Fed decide the appropriate level for the federal funds rate? And how, having made that decision, does the Fed get the fede ...
Lecture 2
... The point estimate of consumption growth under business as usual in Stern (2006) is g(C(t)) = 1.3% a year. Use this in equation (4) to obtain: D(t) = 2.05% a year for Cline D(t) = 4.30% a year for Nordhaus D(t) = 1.40% a year for Stern That is why Cline and Stern arrive at similar conclusions and w ...
... The point estimate of consumption growth under business as usual in Stern (2006) is g(C(t)) = 1.3% a year. Use this in equation (4) to obtain: D(t) = 2.05% a year for Cline D(t) = 4.30% a year for Nordhaus D(t) = 1.40% a year for Stern That is why Cline and Stern arrive at similar conclusions and w ...
NBER WORKING PAPER SERIES ESTIMATED MACROECONOMIC EFFECTS OF DEFICIT TARGETING
... Consider some event that lowers the sales of the firm sector. This lowers production, which in turn lowers investment and employment. Lower employment implies a decrease in labor market tightness, which implies an increase in the labor constraint variable, which in turn leads to lower consumption. L ...
... Consider some event that lowers the sales of the firm sector. This lowers production, which in turn lowers investment and employment. Lower employment implies a decrease in labor market tightness, which implies an increase in the labor constraint variable, which in turn leads to lower consumption. L ...
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.