History of Money
... a) Low inflation, stable exchange rates, relatively rapid economic growth and less real instability than in the interwar period (Bordo 1981, 1993). It also was an era of rapidly expanding international trade in commodities, services and factors production (Bordo, 1999). This favorable economic perfo ...
... a) Low inflation, stable exchange rates, relatively rapid economic growth and less real instability than in the interwar period (Bordo 1981, 1993). It also was an era of rapidly expanding international trade in commodities, services and factors production (Bordo, 1999). This favorable economic perfo ...
The Credit Channel in Middle Income Countries
... debt in foreign currency. Along the equilibrium path the amplification mechanism works as follows. An increase in the domestic lending rate leads to higher debt service obligations and thus implies that firms can now borrow less at each level of net worth. Lower borrowing results in lower investment ...
... debt in foreign currency. Along the equilibrium path the amplification mechanism works as follows. An increase in the domestic lending rate leads to higher debt service obligations and thus implies that firms can now borrow less at each level of net worth. Lower borrowing results in lower investment ...
the terms of the debate
... the real world a country's exports and imports to the rest of the world frequently will not balance, either in the short-term or over a longer period such as a year, the latter situation constituting a "structural" imbalance. Unless trade is by barter, accounts are settled in money, with exporters i ...
... the real world a country's exports and imports to the rest of the world frequently will not balance, either in the short-term or over a longer period such as a year, the latter situation constituting a "structural" imbalance. Unless trade is by barter, accounts are settled in money, with exporters i ...
Trade Network Centrality and Currency Risk Premia
... using observed trade data. As predicted, a 1 standard deviation increase in a country’s centrality lowers its annualized currency risk premia by 0.9% and its interest rate differential by 1.6%, relative to the U.S. This is a large effect given that the cross-sectional standard deviation of average ris ...
... using observed trade data. As predicted, a 1 standard deviation increase in a country’s centrality lowers its annualized currency risk premia by 0.9% and its interest rate differential by 1.6%, relative to the U.S. This is a large effect given that the cross-sectional standard deviation of average ris ...
1. Setting the exchange rate
... between countries which choose floating exchange rate regime and those with pegged currencies? It is obvious that ”no single exchange rate regime is suitable for all countries or in all circumstances” (IMF 2000: 7). The member countries of the IMF may adopt the exchange rate arrangements of their ch ...
... between countries which choose floating exchange rate regime and those with pegged currencies? It is obvious that ”no single exchange rate regime is suitable for all countries or in all circumstances” (IMF 2000: 7). The member countries of the IMF may adopt the exchange rate arrangements of their ch ...
INTL303chpt4
... – impacts international trade – e.g., British inflation rises against US inflation British goods become more expensive relative to US decrease of US demand for pound sterling increase in British demand for “cheaper” US goods increase in British demand for $US increase in supply of pounds on ...
... – impacts international trade – e.g., British inflation rises against US inflation British goods become more expensive relative to US decrease of US demand for pound sterling increase in British demand for “cheaper” US goods increase in British demand for $US increase in supply of pounds on ...
Understanding Open Market Operations - Economic Research
... objectives would cause the depository institutions’ demand for reserves to outstrip the nonborrowed reserves target, putting upward pressures on the funds rate and other short-term rates. The rise in interest rates, in turn, would reduce ...
... objectives would cause the depository institutions’ demand for reserves to outstrip the nonborrowed reserves target, putting upward pressures on the funds rate and other short-term rates. The rise in interest rates, in turn, would reduce ...
"Foreign Reserves and International Liquidity Under the Bretton Woods System"
... out of which credit could be granted to member countries (in addition to national central bank reserves) in order to finance temporary balance of payments deficits. But the Bretton Woods conference did not provide a definition of reserve adequacy. Quotas at the fund, which set the amount a country c ...
... out of which credit could be granted to member countries (in addition to national central bank reserves) in order to finance temporary balance of payments deficits. But the Bretton Woods conference did not provide a definition of reserve adequacy. Quotas at the fund, which set the amount a country c ...
Exchange-Rate Systems and Interest-Rate Behaviour
... a parity that are periodically revised in relatively small steps in a way intended to keep the bands in line with the fundamentals (see Williamson (2000)). Compared with the fixed exchange-rate system or Krugman’s (1991) type of target zone, the adjustable band systems can reduce the possibility of ...
... a parity that are periodically revised in relatively small steps in a way intended to keep the bands in line with the fundamentals (see Williamson (2000)). Compared with the fixed exchange-rate system or Krugman’s (1991) type of target zone, the adjustable band systems can reduce the possibility of ...
Exchange Rate Regimes in Emerging Markets
... and Velasco (2000) argue, a hard fix may make a balanceof-payments crisis less likely only by making a banking crisis more likely. Eichengreen and Hausmann (1999) suggest that financial markets characterized by “original sin” can be problematic under both fixed and flexible exchange rate regimes. Th ...
... and Velasco (2000) argue, a hard fix may make a balanceof-payments crisis less likely only by making a banking crisis more likely. Eichengreen and Hausmann (1999) suggest that financial markets characterized by “original sin” can be problematic under both fixed and flexible exchange rate regimes. Th ...
NBER WORKING PAPER SERIES
... trap would not be of practical interest if the liquidity trap were a theoretical curiosum. There can be little doubt that the liquidity trap was perceived in this way for much if not most of the second half of the 20th century. But no longer. Means and methods for removing the zero ‡oor under the no ...
... trap would not be of practical interest if the liquidity trap were a theoretical curiosum. There can be little doubt that the liquidity trap was perceived in this way for much if not most of the second half of the 20th century. But no longer. Means and methods for removing the zero ‡oor under the no ...
Banks` Reserve Management, Transaction Costs, and the Timing of
... We obtained our data from the Federal Reserve Bank of New York. Interest rate data are daily effective federal funds rates, computed as transaction-weighted rates on unsecured overnight loans arranged by the (usually, 5 or so) funds brokers. These are the rates monitored by the Fed for intervention ...
... We obtained our data from the Federal Reserve Bank of New York. Interest rate data are daily effective federal funds rates, computed as transaction-weighted rates on unsecured overnight loans arranged by the (usually, 5 or so) funds brokers. These are the rates monitored by the Fed for intervention ...
NBER WORKING PAPER SERIES SELF-VALIDATING OPTIMUM CURRENCY AREAS Giancarlo Corsetti Paolo Pesenti
... equilibrium pass-through is either 100 percent or zero as producers optimally choose ‘corner’ pricing strategies to prevent their markups from being affected by exchange rate fluctuations.2 There is one equilibrium in which firms choose to preset prices in domestic currency, and let the foreign pric ...
... equilibrium pass-through is either 100 percent or zero as producers optimally choose ‘corner’ pricing strategies to prevent their markups from being affected by exchange rate fluctuations.2 There is one equilibrium in which firms choose to preset prices in domestic currency, and let the foreign pric ...
The Yen and Its East Asian Neighbors 1980
... that the rupiah and the peso are both managed tightly in terms of their U.S. dollar exchange rates over a short time horizon, while they have shown significant trend depreciation over a longer horizon (table 7.2); their exchange rate systems may more appropriately be classified as crawling pegs to t ...
... that the rupiah and the peso are both managed tightly in terms of their U.S. dollar exchange rates over a short time horizon, while they have shown significant trend depreciation over a longer horizon (table 7.2); their exchange rate systems may more appropriately be classified as crawling pegs to t ...
Estimation of Optimal International Reserves for Costa Rica: A Micro
... speculative attacks against the national currency. Currently, the BCCR uses two different ways to determine the amount of reserves that is needed: an ad hoc estimation following the Guidotti rule and an optimization model developed by Muñoz and Tenorio (2010), which is based on a methodology by Ben- ...
... speculative attacks against the national currency. Currently, the BCCR uses two different ways to determine the amount of reserves that is needed: an ad hoc estimation following the Guidotti rule and an optimization model developed by Muñoz and Tenorio (2010), which is based on a methodology by Ben- ...
Exchange Rate Pass-Through to Import Prices in the
... evolved considerably over time. After a long period of debate over the law of one price and convergence across countries, beginning in the late 1980s exchange rate pass-through studies emphasized industrial organization and the role of segmentation and price discrimination across geographically dist ...
... evolved considerably over time. After a long period of debate over the law of one price and convergence across countries, beginning in the late 1980s exchange rate pass-through studies emphasized industrial organization and the role of segmentation and price discrimination across geographically dist ...
International Reserves - Independent Evaluation Office (IEO)
... • Reserve adequacy indicators should be applied flexibly and reflect country-specific circumstances; and • The multiple trade-offs involved in decisions on reserve accumulation and reserve adequacy at the country level need to be recognized, and advice on reserves should be integrated with advice in ...
... • Reserve adequacy indicators should be applied flexibly and reflect country-specific circumstances; and • The multiple trade-offs involved in decisions on reserve accumulation and reserve adequacy at the country level need to be recognized, and advice on reserves should be integrated with advice in ...
Currency Mismatch, Systemic Risk in Emerging Europe (December 2009)
... Before the recent crisis, emerging Europe included some of the fastest growing emerging economies, growing at rates that in some cases were even higher than in emerging Asia, even after controlling for differences in initial per capita GDP (Table 1, first column). This growth performance was in part ...
... Before the recent crisis, emerging Europe included some of the fastest growing emerging economies, growing at rates that in some cases were even higher than in emerging Asia, even after controlling for differences in initial per capita GDP (Table 1, first column). This growth performance was in part ...
This PDF is a selection from a published volume from... Economic Research
... Slow adjustment in the composition of U.S. output toward traded goods over an extended time period will not require unprecedented dollar depreciation. High oil prices and high consumption by oil exporters would generate a slower rate of dollar depreciation against the renminbi and higher interest ra ...
... Slow adjustment in the composition of U.S. output toward traded goods over an extended time period will not require unprecedented dollar depreciation. High oil prices and high consumption by oil exporters would generate a slower rate of dollar depreciation against the renminbi and higher interest ra ...
Reserve currency
A reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves. The reserve currency is commonly used in international transactions and often considered a hard currency or safe-haven currency. People who live in a country that issues a reserve currency can purchase imports and borrow across borders more cheaply than people in other nations because they don't need to exchange their currency to do so.By the end of the 20th century, the United States dollar was considered the world's most dominant reserve currency, and the world's need for dollars has allowed the United States government as well as Americans to borrow at lower costs, granting them an advantage in excess of $100 billion per year. However, the U.S. dollar's status as a reserve currency, by increasing in value, hurts U.S. exporters.