Adjustment Investment And The Real Exchange Rate In Developing Countries
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Adjustment Investment And The Real Exchange Rate In Developing Countries
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Author :
language : en
Publisher: World Bank Publications
Release Date :
Adjustment Investment And The Real Exchange Rate In Developing Countries written by and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on with categories.
LDC adjustment packages Riccardo Faini and Jaime de Melo Developing countries have been hit by a fall in their terms of trade, high real interest rates on their external debt, and a drought in commercial lending from abroad. Their subsequent adjustment packages, often supported by loans from the IMF and World Bank, focused on a sharp real exchange rate depreciation to restore external balance and a host of microeconomic reforms to secure a simultaneous supply-side improvement. This paper examines the success of these ‘adjustment with growth' packages in a large sample of developing countries. We find these packages have been much more successful in LDCs which export manufactures than they have in those concentrating on primary exports (primarily low-income African countries); the latter have not resumed sustainable growth, and most of their external adjustment has arisen from expenditure reduction, not an increase in supply. The longer-term prospects for manufacturing exporters are also brighter: there we detect signs of increased efficiency and a smaller decline in investment than in primary exporters. But we also find that a high external debt burden and an unstable macroeconomic environment impede investment in all LDCs. In the longer term, adjustment with growth packages will succeed only if they are accompanied by a more stable macroeconomic environment and appropriate debt relief
Real Exchange Rate Uncertainty And Private Investment In Developing Countries
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Author : Luis Servén
language : en
Publisher: World Bank Publications
Release Date : 2002
Real Exchange Rate Uncertainty And Private Investment In Developing Countries written by Luis Servén and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Capital stock categories.
Serven examines empirically the link between real exchange rate uncertainty and private investment in developing countries using a large cross country-time series data set. He builds a GARCH-based measure of real exchange rate volatility and finds that it has a strong negative impact on investment, after controlling for other standard investment determinants and taking into account their potential endogeneity. The impact of uncertainty is not uniform, however. There is some evidence of threshold effects, so that uncertainty only matters when it exceeds some critical level. In addition, the negative impact of real exchange rate uncertainty on investment is significantly larger in economies that are highly open and in those with less developed financial systems.
Economic Adjustment And Exchange Rates In Developing Countries
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Author : Sebastian Edwards
language : en
Publisher: University of Chicago Press
Release Date : 2007-12-01
Economic Adjustment And Exchange Rates In Developing Countries written by Sebastian Edwards and has been published by University of Chicago Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007-12-01 with Business & Economics categories.
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.
Real Exchange Rates Economic Complexity And Investment
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Author : Steve Brito
language : en
Publisher: International Monetary Fund
Release Date : 2018-05-10
Real Exchange Rates Economic Complexity And Investment written by Steve Brito and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-05-10 with Business & Economics categories.
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.
Striving For Growth After Adjustment
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Author : Luis Serven
language : en
Publisher: World Bank Publications
Release Date : 1993
Striving For Growth After Adjustment written by Luis Serven and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with Business & Economics categories.
This book presents the results of about three years of work finished in early 1992 in the area of private investment and macroeconomic adjustment. Its purpose is to explore the macroeconomic determinants of investment and the causes and cures for the gap between maroeconomic adjustment and stabilization and the resumption of economic growth in developing countries, a gap that even today - 10 years after the debt crisis and the subsequent adjustment of the eighties - remains wide. This volume highlights the central role of capital formation (public and private) in the restoration of sustainable growth.
Capital Flows Exchange Rate Flexibility And The Real Exchange Rate
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Author : Mr.Tidiane Kinda
language : en
Publisher: International Monetary Fund
Release Date : 2011-01-01
Capital Flows Exchange Rate Flexibility And The Real Exchange Rate written by Mr.Tidiane Kinda and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011-01-01 with Business & Economics categories.
This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel cointegration techniques. The results show that public and private flows are associated with a real exchange rate appreciation. Among private flows, portfolio investment has the highest appreciation effect-almost seven times that of foreign direct investment or bank loans-and private transfers have the lowest effect. Using a de facto measure of exchange rate flexibility, we find that a more flexible exchange rate helps to dampen appreciation of the real exchange rate stemming from capital inflows.
Real Exchange Rate Appreciation In Emerging Markets
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Author : Marialuz Moreno Badia
language : en
Publisher: International Monetary Fund
Release Date : 2014-01-10
Real Exchange Rate Appreciation In Emerging Markets written by Marialuz Moreno Badia and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-01-10 with Business & Economics categories.
A number of emerging markets have experienced substantial real exchange rate appreciation in recent years, generating concerns about competitiveness and prompting policymakers to respond with a combination of mitigating policies. This paper shows that fiscal policy can play a role in alleviating these pressures. Using a sample of 28 emerging market economies over 1983-2011, we estimate a dynamic model of the real exchange rate and find that a permanent fiscal adjustment may reduce appreciation pressures over the long term. Furthermore, the composition of public spending matters, with reductions in current spending playing a key role. To illustrate the importance of these findings, the paper focuses on the case of Brazil. Our results suggest that maintaining fiscal discipline while increasing public investment in Brazil is likely to ease real appreciation pressures, highlighting the importance of tackling long-standing budget rigidities.
The Economics Of Adjustment And Growth
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Author : Pierre-Richard Agénor
language : en
Publisher: La Editorial, UPR
Release Date : 2004-09-30
The Economics Of Adjustment And Growth written by Pierre-Richard Agénor and has been published by La Editorial, UPR this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004-09-30 with Business & Economics categories.
This book provides a systematic and coherent framework for understanding the interactions between the micro and macro dimensions of economic adjustment policies; that is, it explores short-run macroeconomic management and structural adjustment policies aimed at promoting economic growth. It emphasizes the importance of structural microeconomic characteristics in the transmission of policy shocks and the response of the economy to adjustment policies. It has particular relevance to the economics of developing countries. The book is directed to economists interested in an overview of the economics of reform; economists in international organizations, such as the UN, the IMF, and the World Bank, dealing with development; and economists in developing countries. It is also a text for advanced undergraduate students pursuing a degree in economic policy and management and students in political science and public policy.
Exchange Rate Policy In Developing Countries
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Author : Mr.Mohsin S. Khan
language : en
Publisher: International Monetary Fund
Release Date : 1991-05-15
Exchange Rate Policy In Developing Countries written by Mr.Mohsin S. Khan and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991-05-15 with Business & Economics categories.
This paper addresses analytical aspects of exchange rate policy and emphasizes the relationship among exchange rate flexibility, financial discipline, and international competitiveness.
Real Exchange Rates Devaluation And Adjustment
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Author : Sebastian Edwards
language : en
Publisher:
Release Date : 1989
Real Exchange Rates Devaluation And Adjustment written by Sebastian Edwards and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1989 with Devaluation of currency categories.
Real Exchange Rates, Devaluation, and Adjustment provides a unified theoretical and empirical investigation of exchange rate policy and performance in scores of developing countries. It develops a theory of equilibrium and disequilibrium real exchange rates, takes up the question of why devaluations are the most controversial policy measures in poorer nations, and discusses what determines their success or failure. In a lucid fashion, Edwards organizes vast amounts of data on exchange rates - both real and nominal - and discusses their effect on net trade balances, net asset positions, output growth, real wages, and rates of price inflation, analyzed both in time series and through cross country comparisons. Edwards's investigation singles out 39 major devaluation episodes for before and after comparative analyses while simultaneously isolating the separate effects of other important explanatory variables, such as bank credit expansion and changes in the terms of trade. The first part of the book focuses on theoretical models of devaluation and real exchange rate behavior in less developed countries. Special attention is paid to intertemporal channels in the transmission of disturbances. The second part uses a large cross country data set to analyze the way the real exchange rate has behaved in these nations. The data are also used to test the implications of several theories of real exchange rate determination. The third part analyzes actual devaluation experiences between 1962 and 1982. These chapters examine the events leading to a balance of payments crisis and to a devaluation, exploring the relation between macroeconomic disequilibrium, and the imposition of trade and exchange controls. They also investigate the effect of nominal devaluation on key variables such as the balance of payments, the current account, the real exchange rate, real output real wages, and income distribution.