Real Exchange Rates And Foreign Assets
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Real Interest Rates Real Exchange Rates And Net Foreign Assets In The Adjustment Process
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Author : Mr.Thomas Helbling
language : en
Publisher: International Monetary Fund
Release Date : 1995-12-01
Real Interest Rates Real Exchange Rates And Net Foreign Assets In The Adjustment Process written by Mr.Thomas Helbling 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 1995-12-01 with Business & Economics categories.
This paper analyzes the recent behavior of real exchange rates, the trade balance and the net foreign asset position of the United States in an intertemporal optimizing model of the world economy that incorporates heterogeneity across countries and imperfect international capital and good markets. While the model successfully tracks the dynamics of trade balances and net foreign assets it generates too much consumption smoothing and excessively volatile relative prices. Resolving these inadequacies simultaneously is difficult as the elasticity of substitution between tradables and nontradables affects in opposite ways the degree of consumption smoothing and the volatility of relative prices.
The Transfer Problem Revisited
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Author : Philip R. Lane
language : en
Publisher:
Release Date : 2000
The Transfer Problem Revisited written by Philip R. Lane and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000 with Balance of payments categories.
The Transfer Problem Revisited
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Author : Philip R. Lane
language : en
Publisher:
Release Date : 2007
The Transfer Problem Revisited written by Philip R. Lane and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
The relationship between international payments and the real exchange rate--the transfer problem--is a classic question in international economics. We use new data on countries' net external positions together with real exchange rate data to shed light on this question. We present a model yielding testable implications on the long-run co-movements of real exchange rates, external positions, relative GDP and terms of trade, and cross-country and time-series evidence on the subject. Countries with net external liabilities are found to have more depreciated real exchange rates, with the main channel of transmission working through the relative price of nontraded goods.
Real Exchange Rates And Fundamentals
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Author : Luca Antonio Ricci
language : en
Publisher: International Monetary Fund
Release Date : 2008
Real Exchange Rates And Fundamentals written by Luca Antonio Ricci 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 2008 with Business & Economics categories.
This paper employs newly constructed measures for productivity differentials, external imbalances, and commodity terms of trade to estimate a panel cointegrating relationship between real exchange rates and a set of fundamentals for a sample of 48 industrial countries and emerging markets. It finds evidence of a strong positive relation between the CPI-based real exchange rate and commodity terms of trade. The estimated impact of productivity growth differentials between traded and nontraded goods, while statistically significant, is small. Increases in net foreign assets and in government consumption tend to be associated with appreciating real exchange rates.
Long Run Determinants Of The Real Exchange Rate
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Author : Mr.Hamid Faruqee
language : en
Publisher: International Monetary Fund
Release Date : 1994-08-01
Long Run Determinants Of The Real Exchange Rate written by Mr.Hamid Faruqee 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 1994-08-01 with Business & Economics categories.
This paper examines the long-run determinants of the real exchange rate from a stock-flow perspective. The empirical analysis estimates a long-run relationship between the real exchange rate, net foreign assets and other factors affecting trade flows. Using postwar data for the United States and Japan, cointegration analysis supports the finding that the structural factors underlying each country’s net trade and net foreign asset positions determine the long-run path for the real value of the dollar and the yen. The empirical analysis also provides estimates for the underlying stochastic trend in each real exchange rate series.
Estimating The Equilibrium Real Exchange Rate
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Author : Mr.Tarhan Feyzioglu
language : en
Publisher: International Monetary Fund
Release Date : 1997-09-01
Estimating The Equilibrium Real Exchange Rate written by Mr.Tarhan Feyzioglu 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 1997-09-01 with Business & Economics categories.
An equilibrium exchange rate is here defined as the level that is consistent with simultaneous internal and external balances as specified in Montiel (1996). Exogenous “fundamental” variables determining these balances are identified. Along the lines of Edwards (1994), a reduced form is estimated with the cointegration technique for Finland for the period 1975-95. The estimation produced a reasonable set of equilibrium exchange rates that appreciate with positive shocks to the terms of trade, world real interest rates, and the productivity differential between Finland and its trading partners.
The Equilibrium Real Exchange Rate Of The Malagasy Franc
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Author : Mr.John Cady
language : en
Publisher: International Monetary Fund
Release Date : 2003-02-01
The Equilibrium Real Exchange Rate Of The Malagasy Franc written by Mr.John Cady 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 2003-02-01 with Business & Economics categories.
Employing cointegration techniques, the long-run determinants of Madagascar's real exchange rate are examined from a stock-flow perspective. The long-run behavior of the real effective exchange rate is explained by the net foreign asset position and factors affecting trade flows. An index of the long-run equilibrium real exchange rate is developed to assess the degree of misalignment. The general conclusions are that the Malagasy franc has experienced significant misalignment in the past, but that the recent appreciation of the real effective exchange rate is consistent with changes in the fundamentals, particularly anticipated improvements in the net foreign assets position stemming from Madagascar's eligibility for assistance under the enhanced HIPC Initiative.
Exchange Rates And Corporate Performance
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Author : Yakov Amihud
language : en
Publisher: Beard Books
Release Date : 2003
Exchange Rates And Corporate Performance written by Yakov Amihud and has been published by Beard Books this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Business & Economics categories.
This is a reprint of a previously published book. It consists of a series of papers by experts in the field on how the exchange rate volatility of the 1980s affected the financial policies of international firms.
Stock Markets And The Real Exchange Rate
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Author : Benoît Mercereau
language : en
Publisher: International Monetary Fund
Release Date : 2003-05-01
Stock Markets And The Real Exchange Rate written by Benoît Mercereau 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 2003-05-01 with Business & Economics categories.
The paper presents an N-country model with stock markets, in which a closed-form solution for the real exchange rate is derived. Risky asset prices and allocation of risky assets among countries are determined endogenously. Such a framework allows an analysis of how fundamental parameters, such as the variance and covariance of the risky assets or demographic variables, affect the real exchange rate. The predictions of the model are contrasted with the Balassa-Samuelson effect. A new transmission channel of the real exchange rate for parameters such as income on net foreign assets, risk aversion, and risk-hedging opportunities is also explored.
Real Exchange Rates And Foreign Assets
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Author : Marcel Schroder
language : en
Publisher:
Release Date : 2014
Real Exchange Rates And Foreign Assets written by Marcel Schroder and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This thesis consists of three self-contained papers, which contribute to the debates surrounding global imbalances and financial globalization. The papers are unified by their featuring of foreign assets and real exchange rates (RERs) as the central themes. Following the introductory chapter, the first paper revisits the growth impact of RER distortions. The Washington Consensus emphasizes the economic costs of RER misalignment. However, a sizable recent empirical literature finds that undervalued RERs help countries achieve faster economic growth. The study shows that these findings are driven by inappropriate homogeneity assumptions imposed on long-run RER behavior across countries and/or misspecification of the growth equation. When these problems are redressed, the empirical results for a sample of 63 developing countries over the period 1970-2007 suggest that misalignment of the RER, in either direction from the level consistent with external and internal equilibrium reduces economic growth. However, deviations from Balassa-Samuelson adjusted purchasing power parity do not seem to affect growth. The RER should thus be consistent with external and internal balance, irrespective of the purchasing power parity benchmark. The second paper is motivated by the popular view that the surge in China's foreign exchange reserves is due to a distortionary exchange rate policy aimed at keeping the RER undervalued in order to support export-led growth. It undertakes an in-depth empirical investigation to quantify how much "mercantilist" and "precautionary" motives have contributed to the reserve build-up in China during the period 1998Q4-2011Q4. A substantial problem is that theory is consistent with employing two vastly differing approaches to defining and estimating the role of mercantilist reserve accumulation. A priori, either method could generate misleading results. The study shows, however, that the distinction between the two approaches is immaterial in China's case. The results suggest that mercantilism accounts for less than 10 percent of the reserve accumulation. Precautionary motives and other factors seem to be the dominant determinants of the surge in China's international reserves. The third paper studies the macroeconomic impact of valuation effects (changes in net external assets of a country arising from movements in exchange rates or asset returns). In theory, valuation effects are an important channel of international risk sharing through their facilitation of external adjustment. However, the effects can also be economically destabilizing in the presence of frictions in the international financial system. Despite the growing significance of valuation effects in an era of financial globalization, the nature and extent of their macroeconomic effect has not yet been systematically examined, especially in relation to emerging market economies (EMEs). The study examines the macroeconomic impact of valuation effects for 53 countries over 1980-2010. Valuation effects seem to operate as a risk sharing channel in high income countries. For EMEs the results depend on how valuation effects correlate with domestic consumption growth. There is weak evidence that valuation effects act as a risk sharing channel only if the correlation is negative, and are destabilizing otherwise. In the latter case, the welfare loss may well exceed one percent of permanent consumption.