Download or read book Fear of Appreciation written by Eduardo Levy-Yeyati and published by World Bank Publications. This book was released on 2007 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: In recent years the term "fear of floating" has been used to describe exchange rate regimes that, while officially flexible, in practice intervene heavily to avoid sudden or large depreciations. However, the data reveals that in most cases (and increasingly so in the 2000s) intervention has been aimed at limiting appreciations rather than depreciations, often motivated by the neo-mercantilist view of a depreciated real exchange rate as protection for domestic industries. As a first step to address the broader question of whether this view delivers on its promise, the authors examine whether this "fear of appreciation" has a positive impact on growth performance in developing economies. The authors show that depreciated exchange rates appear to induce higher growth, but that the effect, rather than through import substitution or export booms as argued by the mercantilist view, works largely through the deepening of domestic savings and capital accumulation.
Download or read book External Adjustment written by Maurice Obstfeld and published by . This book was released on 2004 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the current account balance increasingly inadequate as a summary of the change in a country's net foreign assets. Nonetheless, unusually large current account imbalances, especially deficits, should remain high on policymakers' list of concerns, even for the richer and less credit-constrained countries. Extreme imbalances signal the need for large and perhaps abrupt real exchange rate changes in the future, changes that might have undesired political and financial consequences given the incompleteness of domestic and international asset markets. Furthermore, of the two sources of the change in net foreign assets -- the current account and the capital gain on the net foreign asset position -- the former is better understood and more amenable to policy influence. Systematic government attempts to manipulate international asset values in order to change the net foreign asset position could have a destabilizing effect on market expectations"--NBER website
Download or read book Current account Sustainability written by Gian Maria Milesi-Ferretti and published by International Finance Section Princeton University Internati. This book was released on 1996 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study presents a notion of current-account sustainability that explicitly considers, in addition to intertemporal solvency, a willingness to pay and to lend. It argues that this notion of sustainability provides a useful framework for understanding the variety of country experiences with protracted current-account imbalances. Based on this notion, the authors identify a number of potential sustainability indicators related to the structure of the economy and the economic policy stance. They use these indicators in the evaluation of the experience of a number of countries that have run persistent current-account imbalances and ask whether they help to discriminate between countries that underwent an external crisis and those that did not.
Download or read book Macroeconomics for Professionals written by Leslie Lipschitz and published by Cambridge University Press. This book was released on 2019-01-23 with total page 312 pages. Available in PDF, EPUB and Kindle. Book excerpt: Understanding macroeconomic developments and policies in the twenty-first century is daunting: policy-makers face the combined challenges of supporting economic activity and employment, keeping inflation low and risks of financial crises at bay, and navigating the ever-tighter linkages of globalization. Many professionals face demands to evaluate the implications of developments and policies for their business, financial, or public policy decisions. Macroeconomics for Professionals provides a concise, rigorous, yet intuitive framework for assessing a country's macroeconomic outlook and policies. Drawing on years of experience at the International Monetary Fund, Leslie Lipschitz and Susan Schadler have created an operating manual for professional applied economists and all those required to evaluate economic analysis.
Download or read book Dollar Adjustment How Far Against What written by and published by Peterson Institute. This book was released on with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The dollar rose about 35 percent in real terms from 1995 to the end of 2001, supporting the US economy of the late 1990s but pushing the current account deficit to a record high. This book looks at the impact of this, examining intervention to achieve desired currency values and the impact of a major dollar realignment on worldwide economies.
Download or read book Conquering the Fear of Freedom written by Shinji Takagi and published by Oxford University Press, USA. This book was released on 2015 with total page 333 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book documents changes in the foreign exchange rate regime and policy in Japan since the end of the Second World War from a historical perspective.
Download or read book Balance of Payments Adjustment 1945 to 1986 written by Ms.Margaret Garritsen De Vries and published by International Monetary Fund. This book was released on 1987-03-15 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written by Margaret Garritsen de Vries, former Historian of the IMF, the book describes the policies and activities the IMF has pursued in helping members achieve balane of payments adjustment. Separate treatment is given to industrial and developing countries, since their balance of payments problems have differed. As examples, Japan, France, the United Kingdom, Colombia, and Mexico as discussed.
Download or read book Current Account Rebalancing and Real Exchange Rate Adjustment Between the U S and Emerging Asia written by Ms.Isabelle Mejean and published by International Monetary Fund. This book was released on 2011-03-01 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: A reduction in the U.S. current account deficit vis-à-vis emerging Asia involves a shift in demand from U.S. to emerging Asia tradable goods and a change in international relative prices. This paper quantifies the required adjustment in the terms of trade and real exchange rates in a three-country open economy model of the U.S., China, and other emerging Asia. We compare scenarios where both Chinese and other emerging Asian export prices change by the same proportion to the case where export prices remain constant in one country and increase in the other. Our results are robust to different assumptions about elasticities of substitution and to introducing a high degree of vertical fragmentation in production in the model.
Download or read book China s Evolving Exchange Rate Regime written by Mr.Sonali Das and published by International Monetary Fund. This book was released on 2019-03-07 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: China’s exchange rate regime has undergone gradual reform since the move away from a fixed exchange rate in 2005. The renminbi has become more flexible over time but is still carefully managed, and depth and liquidity in the onshore FX market is relatively low compared to other countries with de jure floating currencies. Allowing a greater role for market forces within the existing regime, and greater two-way flexibility of the exchange rate, are important steps to build on the progress already made. This should be complemented by further steps to develop the FX market, improve FX risk management, and modernize the monetary policy framework.
Download or read book Rebalancing Economies in Financially Integrating East Asia written by Jenny Corbett and published by Routledge. This book was released on 2014-11-13 with total page 412 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the Asian Financial Crisis (AFC) of 1997–98 large current account surpluses have accumulated in the countries of Asia and the Pacific with corresponding deficits elsewhere. The sharp plunge in global trade volumes during the global financial crisis has highlighted the need for ‘rebalancing’–focussing more on domestic sources of economic growth than on exports in some Asian economies. One key objective of the book is to elucidate the economic structures and policies that give rise to current account surpluses and imbalances and consider what policy adjustments could change them. Another objective is to show the link between financial systems, financial integration and the transmission of economic shocks between countries. The book offers new dimensions to understand ‘rebalancing’ and provides alternative and arguably more fundamental solutions to address imbalances. Rather than focusing on exchange rate misalignment, this book begins from the premise that the imbalances are a macroeconomic problem that reflects a mismatch between savings and investment in the surplus countries. Then, it examines exchange rate policies adopted by countries in the region and finds that part of the explanation for their currency strategy lies in their perceived need to build foreign exchange reserves to provide a buffer in case of instabilities. The book examines whether there are other possibilities for countries to insure against economic volatility by more actively and openly engaging with international capital markets. The studies show that closer financial integration, involving more open financial markets, with well-chosen partners, would be welfare-improving and should reduce the need for the counter-productive, self-insurance policies that result in foreign exchange accumulation.
Download or read book The United States as a Debtor Nation written by William R Cline and published by Columbia University Press. This book was released on 2005-09-30 with total page 325 pages. Available in PDF, EPUB and Kindle. Book excerpt: The United States has once again entered into a period of large external imbalances. This time the current account deficit, at nearly 6 percent of GDP in 2004, is much larger than in the last episode, when the deficit peaked at about 3.5 percent of GDP in 1987. Moreover, the deficit is on track to become substantially larger over the next several years. This study examines whether the large and growing current account deficit is a problem, and if so, how the problem can be solved. A central policy conclusion of this study is that it is increasingly important that the United States reduce its external current account deficit. This deficit is no longer benign as it arguably was in the late 1990s when it was financing high investment instead of high consumption and large government dissaving.
Download or read book Exchange Rate Misalignment in Developing Countries written by Sebastian Edwards and published by Johns Hopkins University Press. This book was released on 1988 with total page 110 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article analyzes the theory of equilibrium real exchange rates and defines misalignment as a deviation of the real exchange rate (RER) from its equilibrium level. The role of macroeconomic policies is then analyzed under three alternative nominal exchange rate regimes: predetermined nominal exchange rates; floating nominal rates; and dual or black market nominal exchange rates. This discussion points out how inconsistent macroeconomic policies often lead to real exchange rate misalignment. Corrective measures, including nominal devaluation and several alternative approaches, are then evaluated.
Download or read book External Imbalances in the Euro Area written by Ms.Ruo Chen and published by International Monetary Fund. This book was released on 2012-10-09 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper examines the extent to which current account imbalances of euro area countries are related to intra-euro area factors and to external trade shocks. We argue that the traditional explanations for the rising imbalances are correct, but are incomplete. We uncover a large impact of declines in export competitiveness and asymmetric trade developments vis-à-vis the rest of the world –in particular vis-à-vis China, Central and Eastern Europe, and oil exporters- on the external balance of euro area debtor countries. While current account imbalances of euro area deficit countries vis-à-vis the rest of the world increased, they were financed mostly by intra-euro area capital inflows (in particular by the purchase of government and financial institutions’ securities, and cross-border interbank lending) which permitted external imbalances to grow over time.
Download or read book External Finance and Adjustment written by Karel Jansen and published by Springer. This book was released on 1997-12-13 with total page 501 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book studies the impact of different sources of external finance on growth and development in different country contexts. An important finding of the study is that 'success' or 'failure' in the productive use of external and domestic financial resources cannot be explained on the basis of single factors such as external shocks or 'bad' versus 'sound' policies. Rather, they are outcomes of complex interactions between changes in exogenous factors (such as fluctuations in external finance and trade shocks), existing economic structures and the responses to shocks by domestic public and private sector agents. This finding also implies that there are no recipes in economic policy-making which are generally applicable; the 'best' policy has to be designed specifically for each country.
Download or read book G7 Current Account Imbalances written by Richard H. Clarida and published by University of Chicago Press. This book was released on 2007-11-01 with total page 518 pages. Available in PDF, EPUB and Kindle. Book excerpt: The current account deficit of the United States is more than six percent of its gross domestic product—an all-time high. And the rest of the world, including other G7 countries such as Japan and Germany, must collectively run current account surpluses to finance this deficit. How long can such unevenness between imports and exports be sustained, and what form might their eventual reconciliation take? Putting forth scenarios ranging from a gradual correction to a crash landing for the dollar, G7 Current Account Imbalances brings together economists from around the globe to consider the origins, status, and future of those disparities. An esteemed group of collaborators here examines the role of the bursting of the dot-com bubble, the history of previous episodes of current account adjustments, and the possibility of the Euro surpassing the dollar as the leading international reserve currency. Though there are areas of broad agreement—that the imbalances will ultimately decline and that currency revaluations will be part of the solution—many areas of contention remain regarding both the dangers of imbalances and the possible forms of adjustment. This volume will be of tremendous value to economists, politicians, and business leaders alike as they look to the future of the G7 economies.
Download or read book Open Economy Macroeconomics written by Helmut Frisch and published by Springer. This book was released on 2016-07-27 with total page 437 pages. Available in PDF, EPUB and Kindle. Book excerpt: The integration of market economies is one of the most remarkable features of international economics, which has important implications for macroeconomic performance in open economies. Equally important is the declining relevance of the real versus the monetary theory dichotomy. These papers focus on those aspects of monetary policy which relate to credibility and non-neutrality; the domestic adjustment to foreign shocks; the interdependence of open economies and their strategic interactions. An important section is also devoted to the innovative modelling of exchange rate dynamics.
Download or read book Economic Adjustment and Exchange Rates in Developing Countries written by Sebastian Edwards and published by University of Chicago Press. This book was released on 2007-12-01 with total page 460 pages. Available in PDF, EPUB and Kindle. Book excerpt: In spite of the attention paid exchange rates in recent economic debates on developing countries, relatively few studies have systematically analyzed in detail the various ramifications of exchange rate policy in these countries. In this new volume from the National Bureau of Economic Research, leading economists use rigorous models to tackle various exchange rate issues, while also illuminating policy implications that emerge from their analyses. The volume, divided into four main sections, addresses: the role of exchange rates in stabilization programs and the adjustment process; the importance of exchange rate policy during liberalization reform in developing countries; exchange rate problems relevant and unique to developing countries, illustrated by case studies; and the problems defining, measuring, and identifying determinants of real exchange rates. Authors of individual papers examine the relation between commercial policies and exchange rates, the role of exchange rate policy in stabilization programs, the effectiveness of devaluations as a policy tool, and the interaction between exchange rate terms of trade an capital flow. This research will not only prove crucial to our understanding of the role of exchange rates in developing countries, but will clearly set the standard for future work in the field.
