Download or read book Money Non traded Goods and Devaluation in a Small Open Economy written by Ma Cecilia Tancino Gonzalez and published by . This book was released on 1988 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Money non traded goods and devaluation in a small open economy written by María C. González and published by . This book was released on 1988 with total page 101 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Optimal Devaluations written by Constantino Hevia and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: "According to the conventional wisdom, when an economy enters a recession and nominal prices adjust slowly, the monetary authority should devalue the domestic currency to make the recession less severe. The reason is that a devaluation of the currency lowers the relative price of non-tradable goods, and this reduces the necessary adjustment in output relative to the case in which the exchange rate remains constant. This paper uses a simple small open economy model with sticky prices to characterize optimal fiscal and monetary policy in response to productivity and terms of trade shocks. Contrary to the conventional wisdom, in this framework optimal exchange rate policy cannot be characterized just by the cyclical properties of output. The source of the shock matters: while recessions induced by a drop in the price of exportable goods call for a devaluation of the currency, those induced by a drop in productivity in the non-tradable sector require a revaluation."--World Bank web site.
Download or read book Current Issues in Open Economy Macroeconomics written by J. L. Ford and published by . This book was released on 1990 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: Open economy macroeconomics is a major focus of research interest stimulated in part by the increasing interdependence of the world economy and by the move towards floating exchange rates. This important new book addresses several central issues in the macroeconomic theory of different forms of open economies under differing degrees of dependency.
Download or read book Real Exchange Rates and the Prices of Nontradable Goods written by Mr.Gian Milesi-Ferretti and published by International Monetary Fund. This book was released on 1994-02-01 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper attempts to provide a perspective on real exchange rate developments following the inception of the EMS. The focus is on structural determinants of real exchange rates, notably the behavior of tradables and nontradable prices and productivity. It is found that changes in the relative price of tradable goods in terms of nontradables account for a sizable fraction of real exchange rate dynamics during the EMS period. Sectoral productivity growth differential help explain the behavior of the relative price of tradable goods, especially in the long run. There is also some evidence that the EMS has extended on relative price behavior.
Download or read book International Transmission of Monetary Policies written by Mriduchhanda Paul and published by . This book was released on 2005 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: Countries are engaged more and more in investing abroad. In this context, one would be interested to know how the devaluation of a country's currency could affect the level of foreign investment. In addition, agents in many countries want to hold foreign currency for different purposes; thus, domestic inflation is affected not only by domestic economic variables but also by the holding of foreign currency. Hence, it is interesting to investigate how the holding of foreign currency affects domestic inflation in some countries. Chapter 1 presents the introduction and plan of study of the thesis. In chapter 2, the effect of the devaluation of the exchange rate on the level of foreign investment is examined in a two-country model of international trade. There are both traded goods and non-traded goods in the two countries, in addition to the public good, which is financed by tariff revenue in the host country. We find that the effect of devaluation on foreign investment comes through the change in the price of non-tradable goods of the host country. Devaluation of the host country's currency increases the tariff revenue, increasing the availability of the public good in the host country. If this increases the price of non-tradable goods, the level of foreign investment increases, too. In chapter 3, a two-period, two-country, multi-good model of international trade is developed to examine the effect of temporary devaluation on both the contemporaneous and the inter-temporal level of foreign investment from the source country to the host country. The two countries are small, open economies in the goods markets, but are interlinked by foreign investment and by borrowing and lending. It is found that there is no effect of temporary devaluation on contemporaneous foreign investment, but the effect on future foreign investment is positive via the working of the international credit market. Both monetary and non-monetary factors can influence the inflation of an economy. Among the monetary factors are the domestic money supply and interest rate; among the non-monetary factors are the cost of inputs and the budget deficit. As people in an economy hold more foreign currency, inflation becomes dependent on foreign money holding as well. In chapter 4, besides the effects of other domestic economic variables, the effects of holding foreign currency on Mexican and Peruvian inflation are examined. It is observed that foreign money holding in both countries contributes much to the inflation in those respective countries.
Download or read book Saving and Investment in an Open Economy with Non traded Goods written by Charles Engel and published by . This book was released on 1989 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Irreversibility Uncertainty and Investment written by Robert S. Pindyck and published by World Bank Publications. This book was released on 1989 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Irreversible investment is especially sensitive to such risk factors as volatile exchange rates and uncertainty about tariff structures and future cash flows. If the goal of macroeconomic policy is to stimulate investment, stability and credibility may be more important than tax incentives or interest rates.
Download or read book Dominant Currency Paradigm A New Model for Small Open Economies written by Camila Casas and published by International Monetary Fund. This book was released on 2017-11-22 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) the terms-of-trade is stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports, driven by the dollar exchange rate while exports respond weakly, if at all; (e) strengthening of the dominant currency relative to non-dominant ones can negatively impact global trade; (f) optimal monetary policy targets deviations from the law of one price arising from dominant currency fluctuations, in addition to the inflation and output gap. Using data from Colombia we document strong support for the dominant currency paradigm.
Download or read book Open Economy Macroeconomics written by Martín Uribe and published by Princeton University Press. This book was released on 2017-04-04 with total page 646 pages. Available in PDF, EPUB and Kindle. Book excerpt: A cutting-edge graduate-level textbook on the macroeconomics of international trade Combining theoretical models and data in ways unimaginable just a few years ago, open economy macroeconomics has experienced enormous growth over the past several decades. This rigorous and self-contained textbook brings graduate students, scholars, and policymakers to the research frontier and provides the tools and context necessary for new research and policy proposals. Martín Uribe and Stephanie Schmitt-Grohé factor in the discipline's latest developments, including major theoretical advances in incorporating financial and nominal frictions into microfounded dynamic models of the open economy, the availability of macro- and microdata for emerging and developed countries, and a revolution in the tools available to simulate and estimate dynamic stochastic models. The authors begin with a canonical general equilibrium model of an open economy and then build levels of complexity through the coverage of important topics such as international business-cycle analysis, financial frictions as drivers and transmitters of business cycles and global crises, sovereign default, pecuniary externalities, involuntary unemployment, optimal macroprudential policy, and the role of nominal rigidities in shaping optimal exchange-rate policy. Based on courses taught at several universities, Open Economy Macroeconomics is an essential resource for students, researchers, and practitioners. Detailed exploration of international business-cycle analysis Coverage of financial frictions as drivers and transmitters of business cycles and global crises Extensive investigation of nominal rigidities and their role in shaping optimal exchange-rate policy Other topics include fixed exchange-rate regimes, involuntary unemployment, optimal macroprudential policy, and sovereign default and debt sustainability Chapters include exercises and replication codes
Download or read book Quality Trade and Exchange Rate Pass Through written by Natalie Chen and published by International Monetary Fund. This book was released on 2014-03-12 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates theoretically and empirically the heterogeneous response of exporters to real exchange rate fluctuations due to product quality. Our model shows that the elasticity of demand perceived by exporters decreases with a real depreciation and with quality, leading to more pricing-to-market and to a smaller response of export volumes to a real depreciation for higher quality goods. We test the proposed theory using a highly disaggregated Argentinean firm-level wine export dataset between 2002 and 2009 combined with experts wine rankings as a measure of quality. The model predictions find strong support in the data and the results are robust to different measures of quality, samples, specifications, and to the potential endogeneity of quality.
Download or read book Exchange Rate Economics written by Ronald MacDonald and published by Routledge. This book was released on 2005 with total page 334 pages. Available in PDF, EPUB and Kindle. Book excerpt: ''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""
Download or read book Principles of International Finance and Open Economy Macroeconomics written by Cristina Terra and published by Academic Press. This book was released on 2015-06-09 with total page 363 pages. Available in PDF, EPUB and Kindle. Book excerpt: Principles of International Finance and Open Economy Macroeconomics: Theories, Applications, and Policies presents a macroeconomic framework for understanding and analyzing the global economy from the perspectives of emerging economies and developing countries. Unlike most macroeconomic textbooks, which typically emphasize issues about developed countries while downplaying issues related to developing countries, this book emphasizes problems in emerging economies, including those in Latin American countries. It also explains recent developments in international finance that are essential to a thorough understanding of the effects and implications of the recent financial crisis. Concentrates on developing country perspectives on International Finance and the Economy, including those in Latin American countries Provides case studies and publicly available data allowing readers to explore theories and their applications Explains recent developments in international finance that are essential to a thorough understanding of the effects and implications of the recent financial crisis Proposes a unified mathematical model accessible to those with basic mathematical skills
Download or read book Real Exchange Rates Economic Complexity and Investment written by Steve Brito and published by International Monetary Fund. This book was released on 2018-05-10 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show that the response of firm-level investment to real exchange rate movements varies depending on the production structure of the economy. Firms in advanced economies and in emerging Asia increase investment when the domestic currency weakens, in line with the traditional Mundell-Fleming model. However, in other emerging market and developing economies, as well as some advanced economies with a low degree of structural economic complexity, corporate investment increases when the domestic currency strengthens. This result is consistent with Diaz Alejandro (1963)—in economies where capital goods are mostly imported, a stronger real exchange rate reduces investment costs for domestic firms.
Download or read book The Open Economy written by Rudiger Dornbusch and published by World Bank Publications. This book was released on 1988 with total page 430 pages. Available in PDF, EPUB and Kindle. Book excerpt: This important book is a teaching manual, in nontechnical language, on policymaking in developing countries. Written at the request of the Economic Development Institute of the World Bank, the papers focus on policy instruments, their use and constraints, and provide case studies of economic policy in Argentina, Brazil, Indonesia, Korea, and Mexico to illustrate basic problems and possible solutions.
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 An Open Economy Macroeconomics Reader written by Mehmet Ugur and published by Psychology Press. This book was released on 2002 with total page 568 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book draws together the seminal contributions to the literature on the nature of macroeconomics in open economies and illuminates the material. This is an essential guide to the subject for students.
