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| Author | : Michael J. Artis |
| Publisher | : |
| Total Pages | : 52 |
| Release | : 2000 |
| Genre | : Foreign exchange rates |
| ISBN | : |
| Author | : Alun H. Thomas |
| Publisher | : International Monetary Fund |
| Total Pages | : 28 |
| Release | : 1997-12 |
| Genre | : Business & Economics |
| ISBN | : |
1. The final stages of European Monetary Unification (EMU) have motivated research into the pros and cons of adopting a common currency. The biggest change occurring under a currency union is the loss of the exchange rate as an instrument of macroeconomic adjustment. According to the literature, a single currency would reduce transactions and information costs but could prove costly in the face of asymmetric shocks or price rigidities (Mundell 1961). Moreover, the costs of a single currency would be smaller if labor and capital were sufficiently mobile and the trade regime was open (McKinnon 1963).
| Author | : Great Britain. Treasury |
| Publisher | : |
| Total Pages | : 92 |
| Release | : 2003 |
| Genre | : Business & Economics |
| ISBN | : |
This publication is part of a set of 18 documents which have been prepared by H.M. Treasury to inform the assessment of the Government's five economic tests for Economic and Monetary Union (EMU) entry into the euro area. It focuses on short and medium run movements in the exchange rate and considers whether such movements tend to be a stabilising reaction to changes in aggregate supply and demand, or whether they tend to be destabilising. Issues discussed include: how exchange rate is determined and its role in the adjustment process; an interpretation of sterling's strength against the euro since 1996; and a comparison of overall exchange rate volatility inside and outside of EMU. The study contains both theoretical and empirical analysis.
| Author | : Mr.Robert P. Flood |
| Publisher | : International Monetary Fund |
| Total Pages | : 9 |
| Release | : 1991-09-01 |
| Genre | : Business & Economics |
| ISBN | : 1451851324 |
Traditionally the choice of exchange rate regime has been seen as a second-best policy choice, which can be directed toward mitigating the distortionary effects of price or information rigidities. In this paradigm the optimal degree of exchange rate flexibility is found to depend of the source and nature of shocks hitting an economy. More recent literature views the exchange rate as a widely and frequently seen manifestation of government policy with careful exchange-rate management emerging as a tool that can enhance shaky policy credibility.
| Author | : International Monetary Fund |
| Publisher | : International Monetary Fund |
| Total Pages | : 53 |
| Release | : 2021-04-23 |
| Genre | : Business & Economics |
| ISBN | : 1513582593 |
Declining commodity prices during mid-2014-2016 posed significant challenges to commodity-exporting economies. The severe terms of trade shock associated with a sharp fall in world commodity prices have raised anew questions about the viability of pegged exchange rate regimes. More recently, the COVID-19 pandemic and the measures needed to contain its spread have been associated with a significant disruption in several economic sectors, in particular, travel, tourism, and hospitality industry, adding to the downward pressure on commodity prices, a sharp fall in foreign exchange earnings, and depressed economic activity in most commodity exporters. This paper reviews country experiences with different exchange rate regimes in coping with commodity price shocks and explores the role of flexible exchange rates as a shock absorber, analyzing the macroeconomic impact of adverse term-of-trade shocks under different regimes using event study and panel vector autoregression techniques. It also analyzes, conceptually and empirically, policy and technical considerations in making exchange rate regime choices and discusses the supporting policies that should accompany a given regime choice to make that choice sustainable. It offers lessons that could be helpful to the Caribbean commodity-exporters.
| Author | : Mr.Paulo Drummond |
| Publisher | : International Monetary Fund |
| Total Pages | : 58 |
| Release | : 2015-07-20 |
| Genre | : Business & Economics |
| ISBN | : 1513562177 |
This paper examines how susceptible East African Community (EAC) economies are to asymmetric shocks, assesses the value of the exchange rate as a shock absorber for these countries, and reviews adjustment mechanisms that would help ensure a successful experience under a common currency. The report draws on analysis of recent experiences and examines likely future changes in the EAC economies.
| Author | : Richard H. Clarida |
| Publisher | : |
| Total Pages | : 96 |
| Release | : 1994 |
| Genre | : Foreign exchange rates |
| ISBN | : |
This paper investigates empirically and attempts to identify the sources of real exchange rate fluctuations since the collapse of Bretton Woods. The paper's first two sections survey and extend earlier, non-structural empirical work on this subject by Campbell and Clarida (1987), Meese and Rogoff (1988), and Cumby and Huizinga (1990). The paper's main contribution is to build and estimate a three equation open macro model in the spirit of Dornbusch (1976) and Obstfeld (1985) and to identify the model's structural shocks - to demand, supply, and money -using the approach pioneered by Blanchard and Quah (1989). For two of the four countries we study, Germany and Japan, our structural estimates imply that monetary shocks, to money supply as well as to the demand for real money balances, explain a substantial amount of the variance of real exchange rates relative to the dollar. We find that demand shocks, to national saving and investment, explain the majority of the variance in real exchange rate fluctuations, while supply shocks explain very little. The model's estimated short run dynamics are strikingly consistent with the predictions of the simple textbook Mundell-Fleming model.
| Author | : Eliphas Ndou |
| Publisher | : Springer |
| Total Pages | : 509 |
| Release | : 2018-01-08 |
| Genre | : Business & Economics |
| ISBN | : 3319622803 |
This book examines the macroeconomic and regulatory impact of domestic and international shocks on the South African economy resulting from the 2009 financial crisis. It also assesses the impact of the US economy’s eventual recovery from the crisis and the prospect of higher US interest rates in future. Told in three parts, the book explores associations between economic growth, policy uncertainty and the key domestic and international transmission channels, and transmission effects, of global financial regulatory and domestic macro-economic uncertainties on subdued and volatile economic recovery, financial channels, lending rate margins, and credit growth. The book concludes by extending its focus to the role of US monetary policy, capital flows and rand/US dollar volatility on the South African economy.
| Author | : Ronald MacDonald |
| Publisher | : Routledge |
| Total Pages | : 334 |
| Release | : 2005 |
| Genre | : Foreign exchange |
| ISBN | : 1134838220 |
''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""
| Author | : Menzie David Chinn |
| Publisher | : International Monetary Fund |
| Total Pages | : 33 |
| Release | : 1997-05-01 |
| Genre | : Business & Economics |
| ISBN | : 1451962169 |
We investigate the long-run relationship between the real exchange rate, traded and nontraded productivity levels, and government spending for 14 OECD countries, using recently developed panel cointegration tests. The results indicate that under certain assumptions it is easier to detect cointegration in panel data than in the available time series; moreover, the rate of reversion to long-run equilibrium is estimated with greater precision. Using the model augmented by oil prices, we find that in 1991 (the last year productivity data are available) there is less overvaluation of the U.S. dollar than that implied by a naive version of purchasing power parity.
