Term paper for the course `Comparative macroeconomic policy`
... interest rates leads to deterioration of balance sheets for both banks (because of maturity mismatch the value of assets is lowered more than the value of liabilities) and non-banks (credit servicing becomes more expensive). Deterioration of non-bank balance sheets also leads to deterioration of ban ...
... interest rates leads to deterioration of balance sheets for both banks (because of maturity mismatch the value of assets is lowered more than the value of liabilities) and non-banks (credit servicing becomes more expensive). Deterioration of non-bank balance sheets also leads to deterioration of ban ...
Credible Currency: The Commitment Problem
... sovereign ownership over mints. Monarchs were free to debase or otherwise devalue their coins with impunity, and to legally discharge their own debts in the debased coin. The “nominalistic principle” thereby established holds that the sovereign prerogative to produce money includes the right to arb ...
... sovereign ownership over mints. Monarchs were free to debase or otherwise devalue their coins with impunity, and to legally discharge their own debts in the debased coin. The “nominalistic principle” thereby established holds that the sovereign prerogative to produce money includes the right to arb ...
20081220101748113
... market to fix exchange rates, each country’s Monetary Policy is more autonomous relative to international circumstances. The money supply can be dedicated solely to addressing domestic economic problems, particularly inflation. For example, a country does not have to import an inflation rate establi ...
... market to fix exchange rates, each country’s Monetary Policy is more autonomous relative to international circumstances. The money supply can be dedicated solely to addressing domestic economic problems, particularly inflation. For example, a country does not have to import an inflation rate establi ...
Document
... • Japan’s Central Bank responded first by raising interest rates and this determined a steep fall of house prices in 1991. This was not, however, accompanied by economic recovery, rather it was followed by a creeping recession. • In the next stage, interest rates were lowered, down to zero, in order ...
... • Japan’s Central Bank responded first by raising interest rates and this determined a steep fall of house prices in 1991. This was not, however, accompanied by economic recovery, rather it was followed by a creeping recession. • In the next stage, interest rates were lowered, down to zero, in order ...
Fed Policy Liftoff and Emerging Markets
... In a globalized world where investments can move freely from one country to another, changes in the course of one country’s monetary policy can also affect other economies. One salient example is the global fallout following reports in 2013 that the Fed might be concluding its unconventional purchas ...
... In a globalized world where investments can move freely from one country to another, changes in the course of one country’s monetary policy can also affect other economies. One salient example is the global fallout following reports in 2013 that the Fed might be concluding its unconventional purchas ...
McKinley Presentation - Carnegie Endowment for International Peace
... The historical roots are in the successes of Japan and the East Asian Tigers, and in the bitter lessons of the Asia Financial Crisis The countries that had liberalized their trade and capital flows learned from the 1997-98 Crisis that they must avoid, at all costs, current-account deficits (especial ...
... The historical roots are in the successes of Japan and the East Asian Tigers, and in the bitter lessons of the Asia Financial Crisis The countries that had liberalized their trade and capital flows learned from the 1997-98 Crisis that they must avoid, at all costs, current-account deficits (especial ...
This PDF is a selection from a published volume from... Bureau of Economic Research
... In Hong Kong, however, what type of credibility does the government need to establish? In a model of time consistency such as KydlandPrescott, the government’s policy objective needs to be different from that of the market equilibrium. Then, what makes Hong Kong’s government objective different from t ...
... In Hong Kong, however, what type of credibility does the government need to establish? In a model of time consistency such as KydlandPrescott, the government’s policy objective needs to be different from that of the market equilibrium. Then, what makes Hong Kong’s government objective different from t ...
Speech By Deputy Prime Minister Ali Babacan at Institute of
... response measures, some unprecedented as the crisis itself, have been taken individually by countries and collectively by international platforms. However, despite these steps, the global economic recovery remains subdued and the downside risks still prevail. When the crisis first hit in 2008, it wa ...
... response measures, some unprecedented as the crisis itself, have been taken individually by countries and collectively by international platforms. However, despite these steps, the global economic recovery remains subdued and the downside risks still prevail. When the crisis first hit in 2008, it wa ...
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... euro because the EU is anyway their major trading partner. Moreover, pegging to the euro gives financial markets an anchor for longer-term expectations, thus reducing the impact of financial shocks. For these countries the classic criteria of the Optimum Currency Areas approach are close to being fu ...
... euro because the EU is anyway their major trading partner. Moreover, pegging to the euro gives financial markets an anchor for longer-term expectations, thus reducing the impact of financial shocks. For these countries the classic criteria of the Optimum Currency Areas approach are close to being fu ...
Chapter 19 Exchange Rate Policy and the Central Bank
... • But the reason that the exchange rate moved was that the domestic interest rate changed. • A foreign exchange intervention affects the value of a country's currency by changing domestic interest rates. ...
... • But the reason that the exchange rate moved was that the domestic interest rate changed. • A foreign exchange intervention affects the value of a country's currency by changing domestic interest rates. ...
Venezuela_en.pdf
... liquidity growth by raising general and marginal reserve requirements for financial institutions. The general reserve requirements were raised in three increments from 17% in October 2013 to 21.5% in April 2014, and marginal requirements from 17% to 31% over the same period. The central bank stepped ...
... liquidity growth by raising general and marginal reserve requirements for financial institutions. The general reserve requirements were raised in three increments from 17% in October 2013 to 21.5% in April 2014, and marginal requirements from 17% to 31% over the same period. The central bank stepped ...
June 2012
... rate are right in the short run. And those who call for a floating exchange rate are right in the long run. How long is the short run, you ask? You must understand. China is 8000 years old. So when I say, short run, it could be 100 years.” -- Li Ruogu, Deputy Governor, People’s Bank of China, Dalian ...
... rate are right in the short run. And those who call for a floating exchange rate are right in the long run. How long is the short run, you ask? You must understand. China is 8000 years old. So when I say, short run, it could be 100 years.” -- Li Ruogu, Deputy Governor, People’s Bank of China, Dalian ...
International Markets
... • Some forward-forward swaps are also being used (both transactions are forward) • Frequently used between banks (including Central Banks) • Consider two banks: Citibank (US) and Lloyds (UK) – If Citibank needs pounds, it can agree to exchange dollars for pounds with Lloyds today and also agree to a ...
... • Some forward-forward swaps are also being used (both transactions are forward) • Frequently used between banks (including Central Banks) • Consider two banks: Citibank (US) and Lloyds (UK) – If Citibank needs pounds, it can agree to exchange dollars for pounds with Lloyds today and also agree to a ...
Events management system: test document
... Of which: First Sudden Stop, then depreciation First depreciation, then Sudden Stop ...
... Of which: First Sudden Stop, then depreciation First depreciation, then Sudden Stop ...
Safe-Asset Slaughter How to Profit Through the Coming
... What would need to happen instead is the issuance of notes backed by gold, much like the dollar before 1933. But that won’t happen because it would move the power of the purse from the government to the holders of capital and the rest of the world would overrun the currency. Fiat currencies allow go ...
... What would need to happen instead is the issuance of notes backed by gold, much like the dollar before 1933. But that won’t happen because it would move the power of the purse from the government to the holders of capital and the rest of the world would overrun the currency. Fiat currencies allow go ...
Chapter Five: Currency Boards - Peterson Institute for International
... board at a very undervalued real exchange rate, the prospect of a real appreciation—without a good mechanism to correct it—is a worrisome one.7 A second important drawback of a currency board is that the country loses the ability to gross-tune monetary policy to deal with asymmetric shocks. This lo ...
... board at a very undervalued real exchange rate, the prospect of a real appreciation—without a good mechanism to correct it—is a worrisome one.7 A second important drawback of a currency board is that the country loses the ability to gross-tune monetary policy to deal with asymmetric shocks. This lo ...
Syllabus - Harvard Kennedy School
... Nature of the approach: The course is a relatively comprehensive treatment of standard textbook models in the area of open-economy macroeconomics. Although real-world examples are sprinkled throughout, the course relies very heavily on algebraic and graphical analysis, as is customary in economics c ...
... Nature of the approach: The course is a relatively comprehensive treatment of standard textbook models in the area of open-economy macroeconomics. Although real-world examples are sprinkled throughout, the course relies very heavily on algebraic and graphical analysis, as is customary in economics c ...
Chapter 32 1. This problem is composed of the examples found in
... you would write if the government had reduced its deficit? Why? ...
... you would write if the government had reduced its deficit? Why? ...
PowerPoint Presentation - McGraw Hill Higher Education
... Political events impact cash flows Extreme form Nationalization Expropriation of assets ...
... Political events impact cash flows Extreme form Nationalization Expropriation of assets ...
Bretton-Woods II
... Bretton Woods II Issues VI • Countries have also found that a strong reserve position creates stability during times of uncertainty – Asian Crisis in the late 1990s • Question – what is a safe level of reserves? • China’s are no doubt excessive • The country’s behavior also affects others: • Many e ...
... Bretton Woods II Issues VI • Countries have also found that a strong reserve position creates stability during times of uncertainty – Asian Crisis in the late 1990s • Question – what is a safe level of reserves? • China’s are no doubt excessive • The country’s behavior also affects others: • Many e ...
The Macro
... Importers – have to give up more $ to get same amount of foreign currency – appears import prices have risen Precise effect of both depends on Price Elasticity of demand for imports and exports ...
... Importers – have to give up more $ to get same amount of foreign currency – appears import prices have risen Precise effect of both depends on Price Elasticity of demand for imports and exports ...
24 Balance of PAyments
... have to be in surplus to balance out the deficit This means one of three things will have to happen 1.Foreign exchange reserves may be used to increase the capital account However, no country is able to fund long term current account deficits with reserves – eventually they will run out 2.It may b ...
... have to be in surplus to balance out the deficit This means one of three things will have to happen 1.Foreign exchange reserves may be used to increase the capital account However, no country is able to fund long term current account deficits with reserves – eventually they will run out 2.It may b ...
Exchange of ideas
... competitive source of financing and the potential to tap a new investor base. “Invoicing goods in yuan for Chinese buyers may provide competitive advantages and the potential for significant cost savings,” Liu noted. The most obvious growth of the yuan is in international trade settlement. At the en ...
... competitive source of financing and the potential to tap a new investor base. “Invoicing goods in yuan for Chinese buyers may provide competitive advantages and the potential for significant cost savings,” Liu noted. The most obvious growth of the yuan is in international trade settlement. At the en ...
Currency war
Currency war, also known as competitive devaluation, is a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a country's currency falls so too does the price of exports. Imports to the country become more expensive. So domestic industry, and thus employment, receives a boost in demand from both domestic and foreign markets. However, the price increase for imports can harm citizens' purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries.Competitive devaluation has been rare through most of history as countries have generally preferred to maintain a high value for their currency. Countries have generally allowed market forces to work, or have participated in systems of managed exchanges rates. An exception occurred when currency war broke out in the 1930s. As countries abandoned the Gold Standard during the Great Depression, they used currency devaluations to stimulate their economies. Since this effectively pushes unemployment overseas, trading partners quickly retaliated with their own devaluations. The period is considered to have been an adverse situation for all concerned, as unpredictable changes in exchange rates reduced overall international trade.According to Guido Mantega, the Brazilian Minister for Finance, a global currency war broke out in 2010. This view was echoed by numerous other government officials and financial journalists from around the world. Other senior policy makers and journalists suggested the phrase ""currency war"" overstated the extent of hostility. With a few exceptions, such as Mantega, even commentators who agreed there had been a currency war in 2010 generally concluded that it had fizzled out by mid-2011.States engaging in possible competitive devaluation since 2010 have used a mix of policy tools, including direct government intervention, the imposition of capital controls, and, indirectly, quantitative easing. While many countries experienced undesirable upward pressure on their exchange rates and took part in the ongoing arguments, the most notable dimension of the 2010–11 episode was the rhetorical conflict between the United States and China over the valuation of the yuan. In January 2013, measures announced by Japan which were expected to devalue its currency sparked concern of a possible second 21st century currency war breaking out, this time with the principal source of tension being not China versus the US, but Japan versus the Eurozone. By late February, concerns of a new outbreak of currency war had been mostly allayed, after the G7 and G20 issued statements committing to avoid competitive devaluation. After the European Central Bank launched a fresh programme of quantitative easing in January 2015, there was once again an intensification of discussion about currency war.