Download or read book International Financial Adjustment written by Pierre-Olivier Gourinchas and published by . This book was released on 2005 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The paper proposes a unified framework to study the dynamics of net foreign assets and exchange rate movements. We show that deteriorations in a country's net exports or net foreign asset position have to be matched either by future net export growth (trade adjustment channel) or by future increases in the returns of the net foreign asset portfolio (hitherto unexplored financial adjustment channel). Using a newly constructed data set on US gross foreign positions, we find that stabilizing valuation effects contribute as much as 31% of the external adjustment. Our theory also has asset pricing implications. Deviations from trend of the ratio of net exports to net foreign assets predict net foreign asset portfolio returns one quarter to two years ahead and net exports at longer horizons. The exchange rate affects the trade balance and the valuation of net foreign assets. It is forecastable in and out of sample at one quarter and beyond. A one standard deviation decrease of the ratio of net exports to net foreign assets predicts an annualized 4% depreciation of the exchange rate over the next quarter"--NBER website

Download or read book International Financial Adjustment written by Pierre-Olivier Gourinchas and published by . This book was released on 2010 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper proposes a unified framework to study the dynamics of net foreign assets and exchange rate movements. We show that deteriorations in a country's net exports or net foreign asset position have to be matched either by future net export growth (trade adjustment channel) or by future increases in the returns of the net foreign asset portfolio (hitherto unexplored financial adjustment channel). Using a newly constructed data set on US gross foreign positions, we find that stabilizing valuation effects contribute as much as 31% of the external adjustment. Our theory also has asset pricing implications. Deviations from trend of the ratio of net exports to net foreign assets predict net foreign asset portfolio returns one quarter to two years ahead and net exports at longer horizons. The exchange rate affects the trade balance and the valuation of net foreign assets. It is forecastable in and out of sample at one quarter and beyond. A one standard deviation decrease of the ratio of net exports to net foreign assets predicts an annualized 4% depreciation of the exchange rate over the next quarter.

Download or read book International Financial Adjustment for China written by Luke Deer and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: International financial adjustment is the process whereby valuation shifts from asset price and currency changes result in relatively durable net wealth transfers across countries' international balance sheets. This paper applies a financial valuation approach to estimate the direction and the broad extent of recent international financial adjustments on China's international balance sheet. We estimate China's international balance sheet losses resulting from the valuation shifts over the period 2005-2010 and reveal that international currency shifts over the past decade have also generated a range of non-balance sheet financial and monetary adjustment pressures for China. This paper also evaluates how China's evolving international financial policy arrangements could better mitigate China's exposure to international financial adjustments. These arrangements include a more effective currency mechanism and the mechanisms to internationalize the RMB to buffer international financial valuation shocks.

Download or read book International Financial Adjustment in a Canonical Open Economy Growth Model written by Richard H. Clarida and published by . This book was released on 2016 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: Gourinchas and Rey (2007) have shown that international financial adjustment (IFA) in the path of expected future returns on a country's international investment portfolio can complement or even substitute for the traditional adjustment channel via a narrowing of country's current account imbalance. In their paper, GR derive this result using a log linearization of a net foreign asset accumulation identity without reference to any specific theoretical model of IFA in expected foreign asset returns or the real exchange rate. In this paper we calibrate the importance of IFA in a standard open economy growth model (Schmitt-Grohe and Uribe, 2003) with a well-defined steady level of foreign liabilities. In this model there is a country specific credit spread which varies as a function of the ratio of foreign liabilities to GDP. We find that allowing for an IFA channel results in a very rapid converge of the current account to its steady state (relative to the no IFA case) so that most of the time that the country is adjusting, all the adjustment is via the IFA channel of forecastable changes in the costs of servicing debt and in the appreciation real exchange rate. By contrast, in the no IFA case, current account adjustment by construction does all the work and current account adjustment is much slower

Download or read book World Finance and Adjustment written by Graham Bird and published by Springer. This book was released on 1985-09-02 with total page 359 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Dealing With Debt written by Thomas J. Biersteker and published by Routledge. This book was released on 2019-03-04 with total page 195 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global debt burden has proven to be a bad bargain for developed and developing countries alike. This selection of case studies illustrates the complexity of international financial negotiations and the difficulty of reaching international agreements satisfactory to both creditors and debtors. The key aspects of debtor country bargaining power are explored-size, strategic significance, internal cohesion, and political stability-as we read of creditors flexing their financial muscles to produce domestic economic reform without significant international debt relief. This volume brings together a theoretical overview of the subject, cases describing the principal institutional actors, carefully excerpted cases of bilateral financial negotiations, sugggestions for further reading, and a helpful glossary of technical terms. It illuminates how complex international financial negotiations are conducted and what their impact is on both the domestic political economy and the international relations of the countries involved.

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 Principles of International Finance written by Daniel R. Kane and published by Routledge. This book was released on 2018-03-15 with total page 251 pages. Available in PDF, EPUB and Kindle. Book excerpt: Principles of International Finance, first published in 1988, provides a comprehensive introduction to international finance which is rapidly becoming an increasingly important branch of international economics. The book is structured so that it can easily be adopted as a complete one-semester course in international finance and is divided into the four major divisions of international finance: The Foreign Exchange Market and the Balance of Payments; Exchange Rate Systems; Equilibrium and the Adjustment Process and The Post-War International Financial System. This book is designed for economics and business undergraduates studying international finance for the first time. It is non-mathematical and presumes no more than a general background in macroeconomics.

Download or read book Critique of Current Arrangements for International Financial Adjustment Under the International Monetary Fund written by David B. Noursi and published by . This book was released on 1965 with total page 472 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The International Adjustment Mechanism written by L. Gomes and published by Springer. This book was released on 1993-07-20 with total page 362 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is about the history of thought and policy on the international adjustment mechanism. Economics emerged as a discipline in its own right largely out of the accumulated reflections, analyses and judgements of a group of writers from the sixteenth to the early nineteenth century who shared a common perspective on matters relating to the adjustment of the balance of payments. The present survey starts with the development of the doctrine at that time and continues the story up to the present debate on economic and monetary union in Europe.

Download or read book Fiscal Policy Economic Adjustment and Financial Markets written by Mr.Mario Monti and published by International Monetary Fund. This book was released on 1989-06-15 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt: Edited by Mario Monti, this volume contains the proceedings of a seminar that was held in Milan at the Centre for Financial and Monetary Economics, Universitá Luigi Bocconi. Participants included government officials, academicians, and economists; they provide a many-faceted view of fiscal policy at the domestic level and in the broader context of international policy coordination.

Download or read book International Financial Management written by Rita M. Rodriguez and published by Prentice Hall. This book was released on 1984 with total page 664 pages. Available in PDF, EPUB and Kindle. Book excerpt: includes index.

Download or read book International Adjustment Open Economies And the Quantity Theory of Money written by Arnold Collery and published by . This book was released on 1971 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book International Financial Transactions and Exchange Rates written by I. Kallianiotis and published by Springer. This book was released on 2013-12-18 with total page 356 pages. Available in PDF, EPUB and Kindle. Book excerpt: International transactions among nations and multinational corporations are important and growing due to the openness of economies all over the world. In this follow-up title to Exchange Rates and International Financial Economics, Kallianiotis examines the role of the exchange rate and trade policy in improving the trade account. He discusses the international parity conditions extensively, together with the most popular theory in international finance, the interest rate parity (IRP) theory. International Financial Transactions and Exchange Rates describes these theories and gives practical solutions for multinational businesses, individuals, and nations. The increasing internationalization of businesses, openness of economies, integration of nations, change in the exchange rate system, and lastly, the deregulation of the financial market and institutions around the world have made the study of international finance necessary for all business students and professionals.

Download or read book The Valuation Channel of External Adjustment written by Fabio Ghironi and published by . This book was released on 2007 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Ongoing international financial integration has greatly increased foreign asset holdings across countries, enhancing the scope for a "valuation channel" of external adjustment (i.e., the changes in a country's net foreign asset position due to exchange rate and asset price changes). We examine this channel of adjustment in a dynamic stochastic general equilibrium model with international equity trading in incomplete asset markets. We show that the risk-sharing properties of international equity trading are tied to the distribution of income between labor income and profits when equities are defined as claims to firm profits in a production economy. For a given level of international financial integration (measured by the size of gross foreign asset positions), the quantitative importance of the valuation channel of external adjustment depends on features of the international transmission mechanism such as the size of financial frictions, substitutability across goods, and the persistence of shocks. Finally, moving from less to more international financial integration, risk sharing through asset markets increases, and valuation changes are larger, but their relative importance in net foreign asset dynamics is smaller.

Download or read book Adjustment Crisis in the Third World written by Richard E. Feinberg and published by Transaction Publishers. This book was released on 1984-01-01 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Determinants of Cross border Equity Flows written by Richard Portes and published by . This book was released on 2000 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: We apply a new approach to a new panel data set on bilateral gross cross-border equity flows between 14 countries, 1989-96. The model integrates elements of the finance literature on portfolio composition and the international macroeconomics and asset trade literature. Gross asset flows depend on market size in both source and destination country as well as trading costs, in which both information and the transaction technology play a role. Distance proxies some information costs, and other variables explicitly represent information transmission, an information asymmetry between domestic and foreign investors, and the efficiency of transactions. The remarkably good results have strong implications for theories of asset trade. We find that the geography of information is the main determinant of the pattern of international transactions, while there is little support in our data for diversification and return-chasing motives for transactions."--Authors.