Download or read book External Shocks Purchasing Power Parity and the Equilibrium Real Exchange Rate written by Shantayanan Devarajan and published by . This book was released on 1991 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Estimating the Equilibrium Real Exchange Rate written by Mr.Tarhan Feyzioglu and published by International Monetary Fund. This book was released on 1997-09-01 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: An equilibrium exchange rate is here defined as the level that is consistent with simultaneous internal and external balances as specified in Montiel (1996). Exogenous “fundamental” variables determining these balances are identified. Along the lines of Edwards (1994), a reduced form is estimated with the cointegration technique for Finland for the period 1975-95. The estimation produced a reasonable set of equilibrium exchange rates that appreciate with positive shocks to the terms of trade, world real interest rates, and the productivity differential between Finland and its trading partners.
Download or read book Sovereign Defaults External Debt and Real Exchange Rate Dynamics written by Mr.Tamon Asonuma and published by International Monetary Fund. This book was released on 2016-02-25 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Emerging countries experience real exchange rate depreciations around defaults. In this paper, we examine this observed pattern empirically and through the lens of a dynamic stochastic general equilibrium model. The theoretical model explicitly incorporates bond issuances in local and foreign currencies, and endogenous determination of real exchange rate and default risk. Our quantitative analysis replicates the link between real exchange rate depreciation and default probability around defaults and moments of the real exchange rate that match the data. Prior to default, interactions of real exchange rate depreciation, originated from a sequence of low tradable goods shocks with the sovereign’s large share of foreign currency debt, trigger defaults. In post-default periods, the resulting output costs and loss of market access due to default lead to further real exchange rate depreciation.
Download or read book Determinants of Angola s Parallel Market Real Exchange Rate written by E. Gelbard and published by International Monetary Fund. This book was released on 1999-07 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purchasing power parity (PPP) hypothesis is often used in assessing a particular level of exchange rate or the adequacy of an exchange rate policy. However, in countries where the real exchange rate is likely to be affected by real factors, PPP becomes a less useful tool, whereas obtaining an estimate of the equilibrium real exchange rate could be beneficial. This paper conducts an empirical examination of Angola's parallel market real exchange rate during the 1992-98 period. We test the PPP hypothesis and then assess the influence of two key variables on the parallel market real exchange rate: the price of oil and the world interest rate.
Download or read book Estimating the Half Life of Theoretically Founded Real Exchange Rate Misalignments written by Megumi Kubota and published by . This book was released on 2013 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper models empirically the short and long-term behavior of the real exchange rate misalignment-a key variable in academic and policy circles. The equilibrium real exchange rate is derived from a theoretical model with intertemporal external equilibrium and internal equilibrium (in traded and non-traded markets) based on the current account dynamics and Harrod-Balassa-Samuelson productivity, respectively. This provides a bridge between theory and empirics that links the real exchange rate and its fundamentals (terms of trade, the ratio of net foreign assets to gross domestic product, and productivity differentials). The paper contributes to the literature by: (a) estimating an unrestricted vector error correction model that examines the short-term dynamics of real exchange rate misalignments and links these deviations with shocks to fundamentals from 1970 to 2010, and (b) computing the speed of reversion of real exchange rate misalignments with respect to a fundamentals-based equilibrium level. The paper reconciles two strands of the empirical literature that estimate the half-life of purchasing power parity deviations: one, the linear adjustment model that renders the consensus half-life estimates of purchasing power parity deviations, and another, the non-linear adjustment model of purchasing power parity deviations. The model estimates the half-life of real exchange rate deviations from their fundamental equilibrium at approximately 2.8 years. Consequently, about 25 percent of the real exchange rate deviation from its equilibrium level is corrected in the next year. Approximately 43 percent of the countries in the sample have a half-life of real exchange rate deviations from equilibrium less than 2.5 years-which is consistent with predictions from non-linear mean reversion models.
Download or read book The Impact of Oil Related Income on the Equilibrium Real Exchange Rate in Syria written by Maher Hasan and published by International Monetary Fund. This book was released on 2008-08-01 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the impact of oil-related income, among other fundamentals, on the equilibrium real effective exchange rate (ERER) in Syria. After reviewing the evolution of the Syrian multiple exchange rate regime since 1960 and assessing alternative measures for the exchange rate, the paper analyzes the impact of oil-related income on the ERER in the context of a behavioral equilibrium exchange rate model. The analysis concludes that ERER appreciates with higher oil-related income, productivity and net foreign assets, but, at odds with the conventional wisdom, depreciates with higher government expenditures given that an increase in expenditures usually translates into higher imports and weaker current account position. In light of the projected real shocks associated with the depletion of oil and the change in other fundamentals in the context of the ongoing transition to a market economy, a more flexible regime would serve Syria better in the future.
Download or read book Working Paper Series written by and published by . This book was released on 1991-05 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Exchange Rate Policy in Developing Countries written by Mr.Mohsin S. Khan and published by International Monetary Fund. This book was released on 1991-05-15 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper addresses analytical aspects of exchange rate policy and emphasizes the relationship among exchange rate flexibility, financial discipline, and international competitiveness.
Download or read book Exchange Rate Unification the Equilibrium Real Exchange Rate and Choice of Exchange Rate Regime written by International Monetary Fund and published by International Monetary Fund. This book was released on 1999-01-01 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews recent developments in the exchange system in the Islamic Republic of Iran and in the real effective exchange rate (REER). It also considers the determinants of the REER in connection with the choice of exchange regime after unification. The study illustrates how economic policy variables and exogenous shocks affect the real exchange rate primarily through the fiscal balance, and consequently, the savings-investment gap. It further illustrates that the appropriate level of REER and its medium-term path depend upon the mix of monetary, fiscal, and structural policies that underpin the evolution of inflation, balance of payments, and productivity growth.
Download or read book Exchange Rate Economics written by Peter Isard and published by Cambridge University Press. This book was released on 1995-09-28 with total page 298 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes and evaluates the literature on exchange rate economics. It provides a wide-ranging survey, with background on the history of international monetary regimes and the institutional characteristics of foreign exchange markets, an overview of the development of conceptual and empirical models of exchange rate behavior, and perspectives on the key issues that policymakers confront in deciding whether, and how, to try to stabilize exchange rates. The treatment of most topics is reasonably compact, with extensive references to the literature for those desiring to pursue individual topics further. The level of exposition is relatively easy to comprehend; the historical and institutional material (part I) and the discussion of policy issues (part III) contain no equations or technical notation, while the chapters on models of exchange rate behavior (part II) are written at a level intelligible to first-year graduate students or advanced undergraduates. The book will enlighten both students and policymakers, and should also serve as a valuable reference for many research economists.
Download or read book Inflation Stabilisation and Capital Mobility written by Roger Dornbusch and published by . This book was released on 1980 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Exchange Rate Analysis in Support of IMF Surveillance written by Mr.Charalambos G. Tsangarides and published by International Monetary Fund. This book was released on 2008-09-08 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt: Exchange rate analysis lies at the center of the IMF's surveillance mandate and policy advice, as well as in the design of IMF-supported programs, and IMF staff are called upon to analyze a wide variety of exchange rate issues in various member countries, both small and large, from the least economically developed to the most advanced, and from those whose currencies circulate only locally to those whose currencies are of global importance. Each year, IMF staff produce dozens of studies on exchange rate issues, some published by the IMF, others in various professional journals or books. This book aims to give a flavor of the topics the IMF staff typically examine under the broad rubric of exchange rate analysis, encompassing several topics: determination and impact of the real exchange rate, assessing competitiveness and the equilibrium real exchange rate in specific countries or country groups, and considerations in the choice of exchange rate regime.
Download or read book The Purchasing Power Estimation of Equilibrium Exchange Rates written by Jorge Salazar-Carrillo and published by . This book was released on 1981 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Equilibrium Exchange Rates written by Ronald MacDonald and published by Springer Science & Business Media. This book was released on 1999-07-31 with total page 364 pages. Available in PDF, EPUB and Kindle. Book excerpt: How successful is PPP, and its extension in the monetary model, as a measure of the equilibrium exchange rate? What are the determinants and dynamics of equilibrium real exchange rates? How can misalignments be measured, and what are their causes? What are the effects of specific policies upon the equilibrium exchange rate? The answers to these questions are important to academic theorists, policymakers, international bankers and investment fund managers. This volume encompasses all of the competing views of equilibrium exchange rate determination, from PPP, through other reduced form models, to the macroeconomic balance approach. This volume is essentially empirical: what do we know about exchange rates? The different econometric and theoretical approaches taken by the various authors in this volume lead to mutually consistent conclusions. This consistency gives us confidence that significant progress has been made in understanding what are the fundamental determinants of exchange rates and what are the forces operating to bring them back in line with the fundamentals.
Download or read book The Economics of Exchange Rates written by Lucio Sarno and published by . This book was released on 2002 with total page 344 pages. Available in PDF, EPUB and Kindle. Book excerpt: Table of contents
Download or read book Inflation Targeting and Exchange Rate Management In Less Developed Countries written by Mr.Marco Airaudo and published by International Monetary Fund. This book was released on 2016-03-08 with total page 65 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic and foreign financial assets. Our central finding is that management of the exchange rate greatly enhances the efficacy of inflation targeting. In a flexible exchange rate system, inflation targeting incurs a high risk of indeterminacy where macroeconomic fluctuations can be driven by self-fulfilling expectations. Moreover, small inflation shocks may escalate into much larger increases in inflation ex post. Both problems disappear when the central bank leans heavily against the wind in a managed float.
Download or read book Exchange Rate Overvaluation and Trade Protection written by Howard J. Shatz and published by World Bank Publications. This book was released on 2000 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Lessons from world experience about the consequences of exchange rate overvaluation (the frequent cause of trade crises), the consequences of trying to defend an overvalued exchange rate, and the most appropriate policies for resolving an overvaluation"--Cover.
