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Author | : Mr.Juan P. Trevino |
Publisher | : International Monetary Fund |
Total Pages | : 31 |
Release | : 2011-11-01 |
Genre | : Business & Economics |
ISBN | : 1463924674 |
Download Oil-Price Boom and Real Exchange Rate Appreciation Book in PDF, ePub and Kindle
The paper employs a heuristic comparative approach suggested by Ismail (2009) to search for evidence of Dutch disease in oil-rich countries of the Central African Economic and Monetary Community (CEMAC). While these countries have benefitted from high international oil prices in recent years, they have also experienced relatively large real exchange rate appreciations, raising concerns regarding the presence of Dutch disease and casting doubts on their ability to achieve high growth and employment in the long run. To isolate from any dynamics related to the exchange rate regime, we focus on the 14 member countries that constitute the CFA franc zone. We separate them into net oil importers and net oil exporters and look at economic growth, the real exchange rate, and the agricultural and external sectors. Based on traditional models, our findings are broadly consistent with the presence of Dutch disease in the second group during the oil-price boom. Departing from these models yields mixed results, suggesting the need to employ a case-by-case approach.
Author | : Juan P. Treviño |
Publisher | : |
Total Pages | : 30 |
Release | : 2014 |
Genre | : |
ISBN | : |
Download Oil-Price Boom and Real Exchange Rate Appreciation Book in PDF, ePub and Kindle
The paper employs a heuristic comparative approach suggested by Ismail (2009) to search for evidence of Dutch disease in oil-rich countries of the Central African Economic and Monetary Community (CEMAC). While these countries have benefitted from high international oil prices in recent years, they have also experienced relatively large real exchange rate appreciations, raising concerns regarding the presence of Dutch disease and casting doubts on their ability to achieve high growth and employment in the long run. To isolate from any dynamics related to the exchange rate regime, we focus on the 14 member countries that constitute the CFA franc zone. We separate them into net oil importers and net oil exporters and look at economic growth, the real exchange rate, and the agricultural and external sectors. Based on traditional models, our findings are broadly consistent with the presence of Dutch disease in the second group during the oil-price boom. Departing from these models yields mixed results, suggesting the need to employ a case-by-case approach.
Author | : Lutz Kilian |
Publisher | : |
Total Pages | : 53 |
Release | : 2019 |
Genre | : Foreign exchange rates |
ISBN | : |
Download Oil Prices, Exchange Rates and Interest Rates Book in PDF, ePub and Kindle
There has been much interest in the relationship between the price of crude oil, the value of the U.S. dollar, and the U.S. interest rate since the 1980s. For example, the sustained surge in the real price of oil in the 2000s is often attributed to the declining real value of the U.S. dollar as well as low U.S. real interest rates, along with a surge in global real economic activity. Quantifying these effects one at a time is difficult not only because of the close relationship between the interest rate and the exchange rate, but also because demand and supply shocks in the oil market in turn may affect the real value of the dollar and real interest rates. We propose a novel identification strategy for disentangling the causal effects of oil demand and oil supply shocks from the effects of exogenous shocks to the U.S. real interest rate and exogenous shocks to the real value of the U.S. dollar. We empirically evaluate popular views about the role of exogenous real exchange rate shocks in driving the real price of oil, and we examine the extent to which shocks in the global oil market drive the U.S. real exchange rate and U.S. real interest rates. Our evidence for the first time provides direct empirical support for theoretical models of the link between oil prices, exchange rates, and interest rates.
Author | : Torfinn Harding |
Publisher | : |
Total Pages | : 37 |
Release | : 2016 |
Genre | : Foreign exchange rates |
ISBN | : |
Download Boom Goes the Price Book in PDF, ePub and Kindle
"We estimate the effect of giant oil and gas discoveries on bilateral real exchange rates. The size and plausibly exogenous timing of such discoveries make them ideal for identifying the effects of an anticipated resource boom on prices. We find that a giant discovery with the value of a country's GDP increases the real exchange rate by 14% within 10 years following the discovery. The appreciation is nearly exclusively driven by an appreciation of the prices of non-tradable goods. We show that these empirical results are qualitatively and quantitatively in line with a calibrated model with forward looking behaviour and Dutch disease dynamics."--Abstract from publisher's website.
Author | : Mr.Irineu E. de Carvalho Filho |
Publisher | : International Monetary Fund |
Total Pages | : 37 |
Release | : 2009-12-01 |
Genre | : Business & Economics |
ISBN | : 145187426X |
Download Exchange Rate Assessments Book in PDF, ePub and Kindle
Are the current account fluctuations in oil-exporting countries "excessive"? How should their real exchange rate respond to the evolution of external (and domestic) fundamentals? This paper proposes methodologies tailored to the specific features of oil-exporting countries that help address these questions. Price-based methodologies (based on the time series of real effective exchange rates) identify a strong link between the real exchange rate and the terms of trade, but have relatively limited explanatory power. On the other hand, an empirical model of the current account, which fits oil exporting countries' data well, and an intertemporal model that takes into account the stock of oil reserves provide useful benchmarks for oil exporters' external balances.
Author | : Robert A. Amano |
Publisher | : |
Total Pages | : 42 |
Release | : 1993 |
Genre | : Foreign exchange rates |
ISBN | : |
Download Oil Prices and the Rise and Fall of the U.S. Real Exchange Rate Book in PDF, ePub and Kindle
Author | : Jouko Rautava |
Publisher | : |
Total Pages | : 0 |
Release | : 2007 |
Genre | : |
ISBN | : |
Download The Role of Oil Prices and the Real Exchange Rate in Russia's Economy Book in PDF, ePub and Kindle
Most people seem to think that Russia's economy and fiscal situation are still crucially tied up with international oil prices and the exchange rate of the rouble, although this view has recently been challenged by some analysts. Empirical research on this topic is, however, scanty. In this paper, the impact of international oil prices and the real exchange rate on Russia's economy and fiscal policy is analysed using VAR methodology and cointegration techniques. The research period covered is 1995:Q1 - 2001:Q3. The results indicate that in the long run a 10% permanent increase (decrease) in international oil prices is associated with a 2.2% growth (fall) in the level of Russian GDP. Respectively, a 10% real appreciation (depreciation) of the rouble is associated with a 2.4% decline (increase) in the level of output. These long-run equilibrium relationships also have a significant impact on short-run dynamics through an error-correction mechanism. The estimation results confirm also a strong dependence of fiscal revenues on output and oil price fluctuations. Estimated parameters and diagnostic statistics do not indicate that Russia's dependence on oil and the real exchange rate would somehow have weakened in recent years.
Author | : Nicola Spatafora |
Publisher | : International Monetary Fund |
Total Pages | : 28 |
Release | : 2003-05 |
Genre | : Business & Economics |
ISBN | : |
Download The Equilibrium Real Exchange Rate in a Commodity Exporting Country Book in PDF, ePub and Kindle
Questions about external competitiveness, exchange rate misalignment, and the appropriate exchange rate policy feature prominently in the Russian policy debate. This paper furthers the debate by estimating empirically Russia's equilibrium real exchange rate (ERER)-that is, the rate consistent with the long-run economic fundamentals-and sheds light on the extent to which exchange rate policy should be changed. The paper confirms that the ERER reflects both productivity and the terms of trade. It suggests that Russia should target a significant medium-term current account deterioration and a real appreciation perhaps exceeding 10 percent. However, this latter number remains very sensitive to the assumed long-run oil prices.
Author | : Mr.Rabah Arezki |
Publisher | : International Monetary Fund |
Total Pages | : 54 |
Release | : 2015-09-29 |
Genre | : Business & Economics |
ISBN | : 1513590766 |
Download News Shocks in Open Economies Book in PDF, ePub and Kindle
This paper explores the effect of news shocks on the current account and other macroeconomic variables using worldwide giant oil discoveries as a directly observable measure of news shocks about future output ? the delay between a discovery and production is on average 4 to 6 years. We first present a two-sector small open economy model in order to predict the responses of macroeconomic aggregates to news of an oil discovery. We then estimate the effects of giant oil discoveries on a large panel of countries. Our empirical estimates are consistent with the predictions of the model. After an oil discovery, the current account and saving rate decline for the first 5 years and then rise sharply during the ensuing years. Investment rises robustly soon after the news arrives, while GDP does not increase until after 5 years. Employment rates fall slightly for a sustained period of time.
Author | : Robert A. Amano |
Publisher | : |
Total Pages | : 28 |
Release | : 1995 |
Genre | : Foreign exchange |
ISBN | : 9780662237785 |
Download Exchange Rates and Oil Prices Book in PDF, ePub and Kindle