Download or read book Essays on Rational Expectations and Flexible Exchange Rates written by Nasser Saidi and published by Routledge. This book was released on 2017-07-14 with total page 205 pages. Available in PDF, EPUB and Kindle. Book excerpt: Originally published in 1982. This book deals with exchange-rate determination and the implications of floating rate regimes for the time paths of prices and quantities. It develops a class of stochastic equilibrium models of the open economy operating under flexible exchange rates, assuming that agents are endowed with rational expectations but do not possess full current information as to the state of the world. Chapters look at a model’s response to economic disturbances, the effect on non-traded goods, and cyclical variations of the terms of trade. The final chapter considers a model to investigate purchasing parity issues.

Download or read book Essays in International Money and Finance written by James R Lothian and published by World Scientific. This book was released on 2017-06-29 with total page 820 pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of the book is to make the author's scholarly research in the areas of international finance and monetary economics easily accessible to other researchers and students. The articles included in the book span a wide range. The topics include the behavior of the three key relations in international finance, purchasing power parity, interest rate parity and real interest rate equality, the relation between money and other key economic variables, financial globalization and the transmission of economic disturbances internationally.

Download or read book Shadows of History written by Douglas L. Campbell and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation is comprised of one essay focusing on the measurement of real exchange rate indexes, three chapters on the various impacts of real exchange rate movements on the economy, two essays on the impact of fixed exchange rate regimes on trade, one essay on the long-run impact of trade shocks, and a final chapter on the diffusion of technology along geographic lines. The common theme is that these essays collectively paint a picture of the world in which history casts surprisingly long shadows, as current economic relationships -- trade, employment, productivity, and output -- are the product of history. In the first essay, coauthored with Ju Hyun Pyun, we propose several new methods of computing real exchange rate indices which fix a subtle, but important, index numbers problem apparent in widely-used series created by the Federal Reserve and the IMF, and also control for productivity. Extending one of these indexes historically for the US back to 1820, we uncover a new empirical fact -- that in 2002, the US price level had been higher relative to trading partners than at any time since the worst year of the Great Depression. The next three chapters essay address the issue of the economic impact of RER movements. To identify a causal impact of RER movements on manufacturing, I compare the US experience in the early 2000s to the 1980s, when large US fiscal deficits led to a sharp appreciation in the dollar, and to Canada's experience in mid-2000s, when high oil prices and a falling US dollar led to an equally sharp appreciation of the Canadian dollar. I use disaggregated sectoral data and a difference-in-difference methodology, finding that an appreciation in relative unit labor costs for the lead to disproportionate declines in employment, productivity and output for both the US and Canada. In addition, I find that the impact of a temporary shock to real exchange rates is surprisingly long-lived. In the second of these chapters, I find scant evidence for an impact of adverse trade shocks on inquality in manufacturing, and in the third, I speculate that the collapse in manufacturing caused by tectonic shifts in relative prices are a likely cause of the "secular stagnation'' experienced in the US since 2000. In the fifth and sixth chapters I challenge previous literature which found that currency unions lead to dramatically larger trade flows. I found that this previous literature did not control for the fact that current trade relationships are the product of historical forces -- in this case, that countries with former colonial relationships experienced only a gradual decay of trade ties over time since independence. Adding in a dynamic control for country-pair specific trends in trade patterns, and omitting currency union changes brought on by major geopolitical events such as communist takeovers and ethnic cleansing episodes severely weakened the previous findings in the literature. In the seventh chapter, I look at the long-run impacts of temporary shocks to trade patterns from the world wars. I find, for example, that while UK manufacturers dominated world export markets before WWI, during the war US exporters rose to prominence, but that after the war the UK could then not regain the market share it had previously, even given the relative reduction of UK GDP. In the final chapter, with coauthor Ju Hyun Pyun, we challenge a previous seminal finding in the development literature which found that a country's ``genetic distance'' to the US predicts its per capita GDP, even while controlling for a whole host of other variables. We find, by contrast, that the apparent impact of genetic distance was not robust to the inclusion of two standard geographic controls -- distance from the equator and a dummy for sub-Saharan Africa.

Download or read book On Exchange Rates written by Jeffrey A. Frankel and published by MIT Press. This book was released on 1993 with total page 468 pages. Available in PDF, EPUB and Kindle. Book excerpt: These seventeen essays provide an accessible and thorough reference for understanding the role of exchange rates in the international monetary system since 1973, when the rates were allowed to float. The essays analyze such issues as exchange rate movements, exchange risk premia, investor expectations of exchange rates and behavior of exchange rates in different systems. Frankel's sound empirical treatment of exchange rate questions shows that it is possible to produce work that is interesting from a purely intellectual viewpoint while contributing to practical knowledge of the real world of international economics and finance.The essays have been organized in a way that provides an introduction to the field of empirical international finance. Part I documents the steady reduction in barriers to international capital movement and leads logically to part II, which explains how exchange rates are determined. Both monetary and portfolio-based models are surveyed in part II, providing a clear transition to the topic of part III; the possible existence of an exchange risk premium. Part IV applies the tools discussed in earlier sections to explore various policy questions related to exchange rate expectations such as whether foreign exchange intervention matters and whether the European monetary system had become credible by 1991. Each part begins with a detailed introduction explaining not only the central issues of that section but also suggesting connections with other essays in the book.Jeffrey A. Frankel is Professor of Economics at the University of California, Berkeley.

Download or read book Three Essays in International Finance written by Byong-Ju Lee and published by Stanford University. This book was released on 2011 with total page 132 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis consists of three essays on international finance. The first essay is "Exchange rates and Fundamentals". A new open interest rate parity condition that takes account of economic fundamentals is developed from stochastic discount factors (SDFs) of two countries. Through this parity condition, business cycles or fundamentals are linked to exchange rates. Key empirical findings from this parity condition are as follows. First, this model beats the random walk hypothesis: economic fundamentals explain exchange rate movements for high interest rate currencies. Exchange rates of low interest rate currencies act like a random walk because they are less correlated with fundamentals owing to their low risk. For example, U.S. business cycles explain the direction of changes in exchange rates against the dollar. The same thing is true for Japan. Second, this model resolves the forward premium puzzle: the forward premium puzzle is not a general characteristic as regarded in previous studies. It happens when the risk awareness of investors is low, during economic expansions and for low risk currencies. The second essay is "Carry Trade and Global Financial Instability". Carry trade, an opportunistic investment strategy that takes advantage of interest rate differential across countries, is identified the cause of the large-scale depreciations of peripheral currencies in the later half of 2008. A simultaneous equations model, which is derived from a conceptual partial equilibrium model for a local foreign exchange market, is estimated from a cross-sectional sample. The results suggest that the larger appreciation of the yen than the dollar was brought about by a lack of the local supply of the yen rather than a more severe crunch of yen credits. The third essay is "The Economic Origin of Letters of Credit". This essay discusses the economic origin of letters of credit, an instrument widely used in international trade. A game theoretical analysis shows that letters of credit improve efficiency in trade settlements, increasing returns in trade. A few notable facts on letters of credit are discussed. First, the new institution is adopted by merchant banks to maximize their profits and in the process, an improvement in efficiency of international transactions is obtained. Second, the organization established by the legacy institution, bills of exchange, played a critical role in adopting the new institution. Third, the legal enforcement is not essential in this economic institution. Finally, two drivers are identified that improve efficiency of transactions: concentration and projection.

Download or read book Essays on Flexible Exchange Rates written by Janet Eve Ceglowski and published by . This book was released on 1986 with total page 596 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Monetary Policy Capital Flows and Exchange Rates written by David G. Dickinson and published by Psychology Press. This book was released on 2002 with total page 316 pages. Available in PDF, EPUB and Kindle. Book excerpt: Max Fry was known internationally for his research on international and domestic financial issues. This book draws together contributions from a range of academic and policy-making friends and colleagues.

Download or read book Essays on Exchange Rates written by Jose Antonio Rodriguez Lopez and published by . This book was released on 2007 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Exchange Rates and Consumption written by Pierre-Olivier Gourinchas and published by . This book was released on 1996 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in International Economics written by John Marcus Fleming and published by . This book was released on 1971 with total page 372 pages. Available in PDF, EPUB and Kindle. Book excerpt: Trade restrictions and economic welfare; International monetary reform; Balance-of-payments policy and the adjustment process.

Download or read book Essays on Exchange Rates and Prices written by Federico Grinberg and published by . This book was released on 2015 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: In these essays, I examine exchange rates and prices in the context of a small open economy. My first chapter is an empirical study of the behavior of nominal and real exchange rates in Mexico in the last 20 years. I present facts for exchange rate pass-through to prices, using both aggregate prices and CPI micro-data. I structure the evidence in two sets of facts that highlight the importance of real shocks and monetary regime in explaining changing patterns of aggregate prices and the CPI micro data. The first set shows that the nominal and real exchange rates have a strong co-movement at short and medium run horizons. Second, real exchange rate movements are mostly explained by changes in relative prices between `at the dock' prices and retail prices. Third, there is a large nominal exchange rate shock, the reason behind the incomplete exchange rate pass-through and the increase in the real exchange rate is not a slow price adjustment of goods that are actually traded, but a less-than-proportional adjustment of retail prices. The second set of facts analyzes the behavior of individual prices used to compute the CPI. First, there is a positive correlation between the fraction of prices that adjust per period (i.e., the frequency of price adjustment) and the level of inflation. Second, this correlation and the role of these changes in the fraction of adjusting prices in inflation is mostly explained by the exchange rate pass through after the 1994 large currency devaluation episode. In the second chapter I study the role of nominal price rigidities in accounting for low CPI inflation after large currency depreciations. Using a small open economy model with menu-cost nominal frictions calibrated to micro data from Mexico's Consumer Price Index, I find that in episodes of large depreciations, the effects of nominal rigidities in retail prices are quantitatively small and short-lived. The incomplete exchange rate pass-through to consumer prices is largely a result of a fall in real wages caused by negative real shocks and nominal stickiness in wages. In my third chapter I present a model of a small open economy subject both to a collateral constraint and downward rigidity in wages. These constraints will interact generating external shocks amplification and, in the presence of a currency peg regime, it also generates unemployment. This can be seen as an example that captures two main themes for small open economies: real exchange rigidities and consumption volatility. The contributions of my chapter are twofold. First, I show how financial amplification effects caused by `over borrowing can generate high unemployment rates without resorting to extreme wage rigidity. Second, it shows that the exchange rate policy faces a tradeoff between unemployment and tradable consumption when the collateral constraint binds. These two insights reflect the tradeoff of maintaining a currency peg during a crises: higher unemployment or an amplification of financial amplification of shocks.

Download or read book Essays in International Economics written by Peter B. Kenen and published by Princeton University Press. This book was released on 2019-01-29 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written form 1957 through 1978 by one of the foremost authorities in the field of international economics, this collection of Peter Kenen's previously published essays deals with issues in the pure theory of international trade, international monetary theory, and international monetary reform. The essays in Part I, "Trade, Tariffs, and Welfare," concern the roles of tangible and human capital in the determination of trade patterns, the joint determination of demand conditions and trade patterns, the gains from international trade, and the effects of migration on economic welfare. Part II, "International Monetary Theory and Policy," contains essays on the theory of gold-exchange standard, the determination of forward exchange rates, the demand for international reserves, economic integration and the delineation of currency areas, and the process of balance of payments adjustment under pegged and floating exchange rates. The essays in Part III, "Monetary Reform and the Dollar," are arranged in chonological order, from 1963 through 1977, and focus on the problems and progress of international monetary reform and on the functioning of the present international monetary system. Peter B. Kenen is Walker Professor of Economics and International Finance at Princeton University. The Princeton Sereies of Collected Essays provides facsimile reprints, in paperback and in cloth, of important articles by leading scholars. Originally published in 1981. The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

Download or read book Essays on Exchange Rates and Central Bank Credibility written by Per-Ola Maneschiöld and published by . This book was released on 2002 with total page 162 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Real Exchange Rates and Exchange Rate Arrangements written by Natalia Golotvina and published by . This book was released on 2004 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Exchange Rate Management Under Uncertainty written by Jagdeep S. Bhandari and published by MIT Press. This book was released on 1987 with total page 342 pages. Available in PDF, EPUB and Kindle. Book excerpt: These twelve essays take up economic management under flexible exchange rates in the presence of uncertainty. Nearly all of the contributions adopt a rational expectations framework, focusing on the stochastic aspects of the assumption and exploring the variability of, for example, output and prices in relation to the variability of various external disturbances.Jagdeep Bhandari is Associate Professor of International Economics at West Virginia University.

Download or read book Three Essays on Exchange Rate Policy and Equilibrium Exchange Rates written by and published by . This book was released on 1992 with total page 402 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Flexible Exchange Rates and the Balance of Payments written by Egon Sohmen and published by North Holland. This book was released on 1980 with total page 386 pages. Available in PDF, EPUB and Kindle. Book excerpt: