Economics 243
... policy is more effective in affecting output when there is a greater degree of capital mobility (i.e., when the BP curve is less steep)? ...
... policy is more effective in affecting output when there is a greater degree of capital mobility (i.e., when the BP curve is less steep)? ...
IFI_Ch10
... rates, the nominal and real interest rates, and the economic prospects, are also in turn affected by changes in the exchange rate ※ In other words, they are not only linked but mutually determined ...
... rates, the nominal and real interest rates, and the economic prospects, are also in turn affected by changes in the exchange rate ※ In other words, they are not only linked but mutually determined ...
Chapter Objectives
... of imported products coming into a country. – Tariffs and quotas are applied to raise revenues and to protect domestic industries from foreign competition. ...
... of imported products coming into a country. – Tariffs and quotas are applied to raise revenues and to protect domestic industries from foreign competition. ...
LECTURE 9: THE OPEN ECONOMY IN THE SHORT RUN 1
... Figure 9.3: Real depreciation : impact on output and the trade balance ...
... Figure 9.3: Real depreciation : impact on output and the trade balance ...
LECTURE 9: THE OPEN ECONOMY IN THE SHORT RUN 1
... Figure 9.3: Real depreciation : impact on output and the trade balance ...
... Figure 9.3: Real depreciation : impact on output and the trade balance ...
Brazil and the G20: Recent Development Strategy and Strength
... forum for international economic coordination, replacing the G7. For the first time in modern history, leading emerging nations have a real chance to shape the evolution of the international monetary system (Dailami and Masson 2009), and the debate around the subject is ever more aroused given the m ...
... forum for international economic coordination, replacing the G7. For the first time in modern history, leading emerging nations have a real chance to shape the evolution of the international monetary system (Dailami and Masson 2009), and the debate around the subject is ever more aroused given the m ...
MCF Outline 6
... of a currency at a specific price within a specific period of time – Currency Put Option: right to sell a currency – Standard volumes and future delivery dates • Open Interest: number of contracts outstanding • Currency options contracts available for limited number of currencies depending on demand ...
... of a currency at a specific price within a specific period of time – Currency Put Option: right to sell a currency – Standard volumes and future delivery dates • Open Interest: number of contracts outstanding • Currency options contracts available for limited number of currencies depending on demand ...
Presentation - CFA Institute
... - If there is excess capacity in the economy, then currency depreciation can increase output/income by switching demand toward domestically produced goods and services. - If the economy is at full employment, then currency depreciation must reduce domestic expenditure to improve the trade balance. ...
... - If there is excess capacity in the economy, then currency depreciation can increase output/income by switching demand toward domestically produced goods and services. - If the economy is at full employment, then currency depreciation must reduce domestic expenditure to improve the trade balance. ...
Chapter 9Currency Exchange Rates
... - If there is excess capacity in the economy, then currency depreciation can increase output/income by switching demand toward domestically produced goods and services. - If the economy is at full employment, then currency depreciation must reduce domestic expenditure to improve the trade balance. ...
... - If there is excess capacity in the economy, then currency depreciation can increase output/income by switching demand toward domestically produced goods and services. - If the economy is at full employment, then currency depreciation must reduce domestic expenditure to improve the trade balance. ...
Economic and Financial Stability via Exchange Rate Volatility
... • If the authorities want to succeed with fixed exchange rate instead, they must often accompany fixed exchange rate with some other measures, resign on using interest policy in managing domestic demand and still have plenty of luck. ...
... • If the authorities want to succeed with fixed exchange rate instead, they must often accompany fixed exchange rate with some other measures, resign on using interest policy in managing domestic demand and still have plenty of luck. ...
PDF
... substitutes for imported food and manufactures could not be easily produced in the extremely difficult conditions of a country only newly emerged from a long and destructive civil war. The attraction of a path that could avoid such an immediate and sharp fiscal retrenchment is obvious. With domesti ...
... substitutes for imported food and manufactures could not be easily produced in the extremely difficult conditions of a country only newly emerged from a long and destructive civil war. The attraction of a path that could avoid such an immediate and sharp fiscal retrenchment is obvious. With domesti ...
Set 4 The foreign exchange market
... facility in Zaragoza, Spain, to manufacture microwave ovens for sale to the European Union market. The plant is expected to cost €4,920,000, and to take about one year to complete. The plant is to be financed over its economic life of eight years. The borrowing capacity created by this capital expen ...
... facility in Zaragoza, Spain, to manufacture microwave ovens for sale to the European Union market. The plant is expected to cost €4,920,000, and to take about one year to complete. The plant is to be financed over its economic life of eight years. The borrowing capacity created by this capital expen ...
Slide 1
... • International spillovers (standard macro) – lead to exports and imports and affect output and employment – lead to capital flows and affect exchange rates, relative prices, interest rates, asset prices, and wealth • Markets cannot manage themselves. This is why nations need active rules, instituti ...
... • International spillovers (standard macro) – lead to exports and imports and affect output and employment – lead to capital flows and affect exchange rates, relative prices, interest rates, asset prices, and wealth • Markets cannot manage themselves. This is why nations need active rules, instituti ...
On Some Unresolved Problems Of Monetary
... In the light of this reality, monetary policy is now burdened with the portfolio changes among assets which influence growth and/or inflation, either because central bankers believe such an ambition is possible, or because governments demand it of them. In this context derivatives, even before their ...
... In the light of this reality, monetary policy is now burdened with the portfolio changes among assets which influence growth and/or inflation, either because central bankers believe such an ambition is possible, or because governments demand it of them. In this context derivatives, even before their ...
Will the Renminbi replace the US Dollar as the world currency?
... China’s export comprises of 48% of the GDP and Chinese Renminbi appreciation will adversely affect the competitiveness of its export sector and economic growth. China’s Trilemma- In 1960, Noble prize winner Robert Mundell inferred that a country at one time can’t have an open capital account, along ...
... China’s export comprises of 48% of the GDP and Chinese Renminbi appreciation will adversely affect the competitiveness of its export sector and economic growth. China’s Trilemma- In 1960, Noble prize winner Robert Mundell inferred that a country at one time can’t have an open capital account, along ...
Chapter 21
... 1. A nominal anchor helps promote price stability by tying inflation expectations to low levels directly through its constraint on the value of money. It can also limit the timeinconsistency problem by providing an expected constraint on monetary policy. 3. Central bankers might think they can boost ...
... 1. A nominal anchor helps promote price stability by tying inflation expectations to low levels directly through its constraint on the value of money. It can also limit the timeinconsistency problem by providing an expected constraint on monetary policy. 3. Central bankers might think they can boost ...
The Foreign Exchange Market
... China’s renminbi is still only used for about 0.3% of foreign exchange transactions ...
... China’s renminbi is still only used for about 0.3% of foreign exchange transactions ...
Would a United States of Europe finally solve the euro zone crisis?
... The single currency had two consequences. The first, clear from the very beginning, was that individual countries lost the power to adapt monetary policy to their own needs (on inflation and/or growth). Monetary policy was targeted to an “average” that, because of the size of the German economy, d ...
... The single currency had two consequences. The first, clear from the very beginning, was that individual countries lost the power to adapt monetary policy to their own needs (on inflation and/or growth). Monetary policy was targeted to an “average” that, because of the size of the German economy, d ...
(I) Relative PPP
... • So a deficit can be closed by either the traditional trade channel (net exports), or • Closed by revaluation effects • NB: depreciation works in same direction ...
... • So a deficit can be closed by either the traditional trade channel (net exports), or • Closed by revaluation effects • NB: depreciation works in same direction ...
2007-08 Global Financial Collapse: Assessing Whether the Crisis
... Both economic and political factors can give rise to these three qualities. There are four frequently cited economic factors. First is the size of economic output and trade, closely linked with the size of the economy as measured by gross domestic product (GDP). Second is an efficient and well-develo ...
... Both economic and political factors can give rise to these three qualities. There are four frequently cited economic factors. First is the size of economic output and trade, closely linked with the size of the economy as measured by gross domestic product (GDP). Second is an efficient and well-develo ...
Ch. 21
... United Kingdom 1. Targets M3 and later M0 2. Problems of M as monetary indicator Japan 1. Forecasts M2 + CDs 2. Innovation and deregulation makes less useful as monetary indicator 3. High money growth 1987-1989: “bubble economy,” then tight money policy Germany and Switzerland 1. Not monetarist rigi ...
... United Kingdom 1. Targets M3 and later M0 2. Problems of M as monetary indicator Japan 1. Forecasts M2 + CDs 2. Innovation and deregulation makes less useful as monetary indicator 3. High money growth 1987-1989: “bubble economy,” then tight money policy Germany and Switzerland 1. Not monetarist rigi ...
what`s behind the chinese currency devaluation
... the funds rate to the December FOMC meeting or even later. ...
... the funds rate to the December FOMC meeting or even later. ...
Slide 1
... Country which has relatively little involvement in the global capital market Coutries with high level of foreign reserves. Countries with flexible labour market. ...
... Country which has relatively little involvement in the global capital market Coutries with high level of foreign reserves. Countries with flexible labour market. ...
International Monetary System 2
... The gold standard as an international monetary system was accepted by most of the countries until the First World War broke out in 1914. The warring nations required huge money supply for financing the activities borne out of war. This was not possible under the gold standard. The strained relations ...
... The gold standard as an international monetary system was accepted by most of the countries until the First World War broke out in 1914. The warring nations required huge money supply for financing the activities borne out of war. This was not possible under the gold standard. The strained relations ...
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.