Download or read book On the Pass through of Large Devaluations written by Carlos Casacuberta and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2002 Uruguay faced a sudden stop of international capital flows, inducing a deep financial crisis and a large devaluation of the peso. The real exchange rate depreciated and exports expanded. Paradoxically, export shares and real exchange rates negatively correlate among Uruguayan exporters around 2002. To unravel this paradox, we develop a small open economy model of heterogeneous firms. Domestic firms are price takers in the international market, operate under monopolistic competition in the domestic market, and face financial constraints when exporting. Confronted to a large nominal devaluation, financial constraints deepen. Financially constrained exporters cannot optimally expand in the export market and react by passing-through the devaluation to the domestic price only partially, expanding domestic sales. As a consequence, the more financially constrained exporters are, the less their export shares expand and the more their firm specific real exchange rates depreciate. As a result, export shares and real exchange rates of exporters are negatively correlated as in the data.

Download or read book Modeling Exchange rate Passthrough After Large Devaluations written by Ariel T. Burstein and published by . This book was released on 2005 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Large devaluations are generally associated with large declines in real exchange rates. We develop a model which embodies two complementary forces that account for the large declines in the real exchange rate that occur in the aftermath of large devaluations. The first force is sticky nontradable-goods prices. The second force is the impact of real shocks that often accompany large devaluations. We argue that sticky nontradable goods prices generally play an important role in explaining post-devaluation movements in real exchange rates. However, real shocks can sometimes be primary drivers of real exchange-rate movements"--National Bureau of Economic Research web site.

Download or read book Monetary Policy Credibility and Exchange Rate Pass Through written by Mr.Yan Carriere-Swallow and published by International Monetary Fund. This book was released on 2016-12-13 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: A long-standing conjecture in macroeconomics is that recent declines in exchange rate pass-through are in part due to improved monetary policy performance. In a large sample of emerging and advanced economies, we find evidence of a strong link between exchange rate pass-through to consumer prices and the monetary policy regime’s performance in delivering price stability. Using input-output tables, we decompose exchange rate pass-through to consumer prices into a component that reflects the adjustment of imported goods at the border, and another that captures the response of all other prices. We find that price stability and central bank credibility have reduced the second component.

Download or read book A Retrospective on the Bretton Woods System written by Michael D. Bordo and published by University of Chicago Press. This book was released on 2007-12-01 with total page 692 pages. Available in PDF, EPUB and Kindle. Book excerpt: At the close of the Second World War, when industrialized nations faced serious trade and financial imbalances, delegates from forty-four countries met in Bretton Woods, New Hampshire, in order to reconstruct the international monetary system. In this volume, three generations of scholars and policy makers, some of whom participated in the 1944 conference, consider how the Bretton Woods System contributed to unprecedented economic stability and rapid growth for 25 years and discuss the problems that plagued the system and led to its eventual collapse in 1971. The contributors explore adjustment, liquidity, and transmission under the System; the way it affected developing countries; and the role of the International Monetary Fund in maintaining a stable rate. The authors examine the reasons for the System's success and eventual collapse, compare it to subsequent monetary regimes, such as the European Monetary System, and address the possibility of a new fixed exchange rate for today's world.

Download or read book International Finance and Financial Crises written by Robert P. Flood and published by Springer Science & Business Media. This book was released on 1999 with total page 302 pages. Available in PDF, EPUB and Kindle. Book excerpt: International Finance and Financial Crises: Essays in Honor of Robert P. Flood, Jr. contains the proceedings of a conference held in honor of Robert P. Flood, Jr. Bob Flood has made important contributions to many areas of economic analysis, including regime switching, speculative attacks, bubbles, stock market volatility, macro models with nominal rigidities, dual exchange rates, target zones, and rules versus discretion in monetary policy. Contributors were invited to address any of the topics or others of their choosing. The results include five papers on topics in international finance; two of these papers, as well as the panel discussion, focus on speculative attacks and financial crises. The other three take new directions in exploring topics in which existing models leave much to be desired.

Download or read book A Monetary and Fiscal History of Latin America 1960 2017 written by Timothy J. Kehoe and published by U of Minnesota Press. This book was released on 2022-01-11 with total page 643 pages. Available in PDF, EPUB and Kindle. Book excerpt: A major, new, and comprehensive look at six decades of macroeconomic policies across the region What went wrong with the economic development of Latin America over the past half-century? Along with periods of poor economic performance, the region’s countries have been plagued by a wide variety of economic crises. This major new work brings together dozens of leading economists to explore the economic performance of the ten largest countries in South America and of Mexico. Together they advance the fundamental hypothesis that, despite different manifestations, these crises all have been the result of poorly designed or poorly implemented fiscal and monetary policies. Each country is treated in its own section of the book, with a lead chapter presenting a comprehensive database of the country’s fiscal, monetary, and economic data from 1960 to 2017. The chapters are drawn from one-day academic conferences—hosted in all but one case, in the focus country—with participants including noted economists and former leading policy makers. Cowritten with Nobel Prize winner Thomas J. Sargent, the editors’ introduction provides a conceptual framework for analyzing fiscal and monetary policy in countries around the world, particularly those less developed. A final chapter draws conclusions and suggests directions for further research. A vital resource for advanced undergraduate and graduate students of economics and for economic researchers and policy makers, A Monetary and Fiscal History of Latin America, 1960–2017 goes further than any book in stressing both the singularities and the similarities of the economic histories of Latin America’s largest countries. Contributors: Mark Aguiar, Princeton U; Fernando Alvarez, U of Chicago; Manuel Amador, U of Minnesota; Joao Ayres, Inter-American Development Bank; Saki Bigio, UCLA; Luigi Bocola, Stanford U; Francisco J. Buera, Washington U, St. Louis; Guillermo Calvo, Columbia U; Rodrigo Caputo, U of Santiago; Roberto Chang, Rutgers U; Carlos Javier Charotti, Central Bank of Paraguay; Simón Cueva, TNK Economics; Julián P. Díaz, Loyola U Chicago; Sebastian Edwards, UCLA; Carlos Esquivel, Rutgers U; Eduardo Fernández Arias, Peking U; Carlos Fernández Valdovinos (former Central Bank of Paraguay); Arturo José Galindo, Banco de la República, Colombia; Márcio Garcia, PUC-Rio; Felipe González Soley, U of Southampton; Diogo Guillen, PUC-Rio; Lars Peter Hansen, U of Chicago; Patrick Kehoe, Stanford U; Carlos Gustavo Machicado Salas, Bolivian Catholic U; Joaquín Marandino, U Torcuato Di Tella; Alberto Martin, U Pompeu Fabra; Cesar Martinelli, George Mason U; Felipe Meza, Instituto Tecnológico Autónomo de México; Pablo Andrés Neumeyer, U Torcuato Di Tella; Gabriel Oddone, U de la República; Daniel Osorio, Banco de la República; José Peres Cajías, U of Barcelona; David Perez-Reyna, U de los Andes; Fabrizio Perri, Minneapolis Fed; Andrew Powell, Inter-American Development Bank; Diego Restuccia, U of Toronto; Diego Saravia, U de los Andes; Thomas J. Sargent, New York U; José A. Scheinkman, Columbia U; Teresa Ter-Minassian (formerly IMF); Marco Vega, Pontificia U Católica del Perú; Carlos Végh, Johns Hopkins U; François R. Velde, Chicago Fed; Alejandro Werner, IMF.

Download or read book Tariff Passthrough at the Border and at the Store Evidence from US Trade Policy written by Alberto Cavallo and published by International Monetary Fund. This book was released on 2019-11-01 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We use micro data collected at the border and at retailers to characterize the effects brought by recent changes in US trade policy - particularly the tariffs placed on imports from China - on importers, consumers, and exporters. We start by documenting that the tariffs were almost fully passed through to total prices paid by importers, suggesting the tariffs' incidence has fallen largely on the United States. Since we estimate the response of prices to exchange rates to be far more muted, the recent depreciation of the Chinese renminbi is unlikely to alter this conclusion. Next, using product-level data from several large multi-national retailers, we demonstrate that the impact of the tariffs on retail prices is more mixed. Some affected product categories have seen sharp price increases, but the difference between affected and unaffected products is generally quite modest, suggesting that retail margins have fallen. These retailers' imports increased after the initial announcement of possible tariffs, but before their full implementation, so the intermediate passthrough of tariffs to their prices may not persist. Finally, in contrast to the case of foreign exporters facing US tariffs, we show that US exporters lowered their prices on goods subjected to foreign retaliatory tariffs compared to exports of non-targeted goods.

Download or read book Global Waves of Debt written by M. Ayhan Kose and published by World Bank Publications. This book was released on 2021-03-03 with total page 403 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Download or read book Full Dollarization written by Andrew Berg and published by International Monetary Fund. This book was released on 2000 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analyzes the costs and benefits of full dollarization, or the adoption by one country of another country's currency. Potential advantages include lower borrowing costs and deeper integration into world markets. But countries lose the ability to devalue, and become dependent on the U.S. Compares with currency board option.

Download or read book Financial Crises Explanations Types and Implications written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2013-01-30 with total page 66 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

Download or read book The Great Devaluation written by Adam Baratta and published by John Wiley & Sons. This book was released on 2020-08-04 with total page 275 pages. Available in PDF, EPUB and Kindle. Book excerpt: #1 Business Bestseller (Wall Street Journal, Amazon, USA Today) The Great Devaluation may be one of the most timely books ever written on the state of the global economy. Baratta sums it up simply enough with the following idea: “What seems crazy in normal times becomes necessary in a crisis.” The Great Devaluation is the #1 bestselling book that explains why the real crisis facing the world today is not the Coronavirus. The real crisis facing the world is explosive government debt and deficits. Governments are now left with no choice but to spend more than they make, borrow more than they can ever repay, and devalue their currencies to cover it all up. Former Hollywood storyteller Adam Baratta brings monetary policy to life in this follow-up to his national bestseller, Gold Is A Better Way. You’ll learn how and why Federal Reserve polices have facilitated an explosion in government debt and have systematically undermined the world financial system in the name of profit. The result? An out of control system where financial inequality has become a ticking time bomb set to blow up the global economy.

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 Prices Wholesale and Retail written by United States. Bureau of Labor Statistics and published by . This book was released on 1931-11 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book IMF Staff Papers written by International Monetary Fund. Research Dept. and published by International Monetary Fund. This book was released on 1952-01-01 with total page 170 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses various foreign payments practices in the United States. Most foreign payments in the United States are, therefore, done along traditional lines in whatever manner. Several nontraditional practices, however, have developed in recent years as the result of trade and payments restrictions established by foreign Governments. The amount and type of exchange sold by the US banks to their customers are limited only, if at all, by regulations abroad or by the banks' own limitations. In making or receiving foreign payments, the US banks deal generally with three types of customers which are, in the order of their importance: exporters and importers, individuals or corporations desiring to make or receive nontrade financial payments, and speculators. Foreign payments for account of individuals are usually small individually however, in the aggregate, they represent an important function of the banks located in the larger cities with a considerable foreign-born population.

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 World Development Report 2020 written by World Bank and published by World Bank Publications. This book was released on 2019-11-19 with total page 511 pages. Available in PDF, EPUB and Kindle. Book excerpt: Global value chains (GVCs) powered the surge of international trade after 1990 and now account for almost half of all trade. This shift enabled an unprecedented economic convergence: poor countries grew rapidly and began to catch up with richer countries. Since the 2008 global financial crisis, however, the growth of trade has been sluggish and the expansion of GVCs has stalled. Meanwhile, serious threats have emerged to the model of trade-led growth. New technologies could draw production closer to the consumer and reduce the demand for labor. And trade conflicts among large countries could lead to a retrenchment or a segmentation of GVCs. World Development Report 2020: Trading for Development in the Age of Global Value Chains examines whether there is still a path to development through GVCs and trade. It concludes that technological change is, at this stage, more a boon than a curse. GVCs can continue to boost growth, create better jobs, and reduce poverty provided that developing countries implement deeper reforms to promote GVC participation; industrial countries pursue open, predictable policies; and all countries revive multilateral cooperation.

Download or read book IMF Staff Papers Volume 52 No 2 written by International Monetary Fund. Research Dept. and published by International Monetary Fund. This book was released on 2005-08-29 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines contractionary currency crashes in developing countries. It explores the causes of India’s productivity surge around 1980, more than a decade before serious economic reforms were initiated. The paper finds evidence that the trigger may have been an attitudinal shift by the government in the early 1980s that, unlike the reforms of the 1990s, was pro-business rather than pro-market in character, favoring the interests of existing businesses rather than new entrants or consumers. A relatively small shift elicited a large productivity response, because India was far away from its income possibility frontier.