External Adjustment PDF Download
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Author | : Maurice Obstfeld |
Publisher | : |
Total Pages | : 64 |
Release | : 2004 |
Genre | : Balance of trade |
ISBN | : |
Download External Adjustment Book in PDF, ePub and Kindle
"Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the current account balance increasingly inadequate as a summary of the change in a country's net foreign assets. Nonetheless, unusually large current account imbalances, especially deficits, should remain high on policymakers' list of concerns, even for the richer and less credit-constrained countries. Extreme imbalances signal the need for large and perhaps abrupt real exchange rate changes in the future, changes that might have undesired political and financial consequences given the incompleteness of domestic and international asset markets. Furthermore, of the two sources of the change in net foreign assets -- the current account and the capital gain on the net foreign asset position -- the former is better understood and more amenable to policy influence. Systematic government attempts to manipulate international asset values in order to change the net foreign asset position could have a destabilizing effect on market expectations"--NBER website
Author | : Giuseppe Tullio |
Publisher | : Springer |
Total Pages | : 148 |
Release | : 1981-06-18 |
Genre | : Business & Economics |
ISBN | : 1349050482 |
Download The Monetary Approach to External Adjustment Book in PDF, ePub and Kindle
Author | : Mr. Rudolfs Bems |
Publisher | : International Monetary Fund |
Total Pages | : 35 |
Release | : 2024-07-26 |
Genre | : |
ISBN | : |
Download Climate Policies and External Adjustment Book in PDF, ePub and Kindle
This paper assesses the economic effects of climate policies on different regions and countries with a focus on external adjustment. The paper finds that various climate policies could have substantially different impacts on external balances over the next decade. A credible and globally coordinated carbon tax would decrease current account balances in greener advanced economies and increase current accounts in more fossil-fuel-dependent regions, reflecting a disproportionate decline in investment for the latter group. Green supply-side policies—green subsidy and infrastructure investment—would increase investment and saving but would have a more muted external sector impact because of the constrained pace of expansion for renewables or the symmetry of the infrastructure boost. Country characteristics, such as initial carbon intensity and net fossil fuel exports, ultimately determine the current account responses. For the global economy, a coordinated climate change mitigation policy package would shift capital towards advanced economies. Following an initial rise, the global interest rates would fall over time with increases in the carbon tax. These external sector effects, however, depend crucially on the degree of international policy coordination and credibility.
Author | : Ryota Nakatani |
Publisher | : International Monetary Fund |
Total Pages | : 36 |
Release | : 2017-12-01 |
Genre | : Business & Economics |
ISBN | : 1484331834 |
Download External Adjustment in a Resource-Rich Economy: The Case of Papua New Guinea Book in PDF, ePub and Kindle
How should resource-rich economies handle the balance of payments adjustment required after commodity price declines? This paper addresses the question theoretically by developing a simple two-period multi-sector model based on Nakatani (2016) to compare different exchange rate policies, and empirically by estimating elasticities of imports and commodity exports with respect to exchange rates using Papua New Guinean data. In the empirical part, using various econometric methods, I find the statistically significant elasticities of commodity exports to real exchange rates. In the theoretical part, by introducing the notion of a shadow exchange rate premium, I show how the rationing of foreign exchange reduces consumer welfare. Using the estimated elasticities and theoretical outcomes, I further discuss policy implications for resource-rich countries with a focus on Papua New Guinea.
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 42 |
Release | : 1988-08-09 |
Genre | : Business & Economics |
ISBN | : 1451957270 |
Download External Adjustment and the Strong Yen Book in PDF, ePub and Kindle
The parameters of a conventional model of Japan’s current account were found to be stable in the period of the steeply rising yen between the fourth quarter of 1985 and the end of 1987. This suggests that Japan’s current account has been adjusting to the strengthening yen in accordance with established historical relationships—a conclusion that is substantiated by the model’s reasonably accurate tracking of the current account in this period. Furthermore, simulations of the model show that the rise in the yen has already made a substantial contribution to correcting Japan’s external imbalance.
Author | : United States. Congress. Joint Economic Committee. Subcommittee on Foreign Policy |
Publisher | : |
Total Pages | : 160 |
Release | : 1970 |
Genre | : United States |
ISBN | : |
Download U.S. foreign trade: the internal and external adjustment mechanisms. September 29, 30 and October 1, 1970 Book in PDF, ePub and Kindle
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 30 |
Release | : 1989-10-27 |
Genre | : Business & Economics |
ISBN | : 1451951841 |
Download External Adjustment and the Optimal Demand for International Reserves Book in PDF, ePub and Kindle
This paper provides a theoretical underpinning for the major determinants of optimal reserve demand in the case where fundamental disequilibrium constitutes a key element governing reserve management. Emphasis is given to the role of reserves to smooth the process of economic adjustment by financing part of external disequilibrium, as well as to meet temporary random fluctuations in the excess demand for foreign exchange. The analysis incorporates this financing aspect of reserve holdings into a simple inventory model and discusses the optimal stock of reserves in the context of the optimal mix of adjustment and financing.
Author | : Camila Casas |
Publisher | : International Monetary Fund |
Total Pages | : 81 |
Release | : 2023-08-11 |
Genre | : Business & Economics |
ISBN | : |
Download The Dominant Currency Financing Channel of External Adjustment Book in PDF, ePub and Kindle
We provide evidence of a new channel through which exchange rates affect trade. Using a novel identification strategy that exploits firms’ maturity structure of foreign currency debt around a large depreciation in Colombia, we show that firms experiencing a stronger debt revaluation of dominant currency debt due to a home currency depreciation compress imports relatively more while exports are unaffected. Dominant currency financing does not lead to an import compression for firms that export, hold foreign currency assets, or are active in the foreign exchange derivatives markets, as they are all hedged against a revaluation of their debt. These findings can be rationalized through the prism of a model with costly state verification and foreign currency borrowing. Quantitatively, the dominant currency financing channel explains a significant part of the external adjustment process in addition to the expenditure switching channel. Pricing exports in the dominant currency, instead of the producer’s currency, mutes the effect of dominant currency financing on trade flows.
Author | : Gustavo Adler |
Publisher | : International Monetary Fund |
Total Pages | : 46 |
Release | : 2020-07-20 |
Genre | : Business & Economics |
ISBN | : 1513512153 |
Download Dominant Currencies and External Adjustment Book in PDF, ePub and Kindle
The extensive use of the US dollar when firms set prices for international trade (dubbed dominant currency pricing) and in their funding (dominant currency financing) has come to the forefront of policy debate, raising questions about how exchange rates work and the benefits of exchange rate flexibility. This Staff Discussion Note documents these features of international trade and finance and explores their implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.
Author | : Mr.Alberto Behar |
Publisher | : International Monetary Fund |
Total Pages | : 45 |
Release | : 2016-09-08 |
Genre | : Business & Economics |
ISBN | : 1475535384 |
Download External Adjustment in Oil Exporters Book in PDF, ePub and Kindle
After the decline in oil prices, many oil exporters face the need to improve their external balances. Special characteristics of oil exporters make the exchange rate an ineffective instrument for this purpose and give fiscal policy a sizeable role. These conclusions are supported by regression analysis of the determinants of the current account balance and of the trade balance. The results show little or no relationship with the exchange rate and, especially for the less diversified oil exporters (including the Gulf Cooperation Council), a strong relationship with the fiscal balance or government spending.