Vehicle Currency Use In International Trade Distribution
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Vehicle Currency Use In International Trade Distribution
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Author : Linda S. Goldberg
language : en
Publisher:
Release Date : 2005
Vehicle Currency Use In International Trade Distribution written by Linda S. Goldberg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with categories.
Vehicle Currency Use In International Trade
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Author : Linda S. Goldberg
language : en
Publisher:
Release Date : 2005
Vehicle Currency Use In International Trade written by Linda S. Goldberg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Foreign exchange categories.
"Although currency invoicing in international trade transactions is central to the transmission of monetary policy, the forces motivating the choice of currency have long been debated. We introduce a model wherein agents involved in international trade can invoice in the exporter's currency, the importer's currency, or a third-country vehicle currency. The model is designed to contrast the contribution of macroeconomic variability with that of industry-specific features in the selection of an invoice currency. We show that producers in industries with high demand elasticities are more likely than producers in other industries to display herding in their choice of currency. This industry-related force is more influential than local macroeconomic performance in determining producers' choices. Drawing on data on invoice currency use in exports and imports for twenty-four countries, we document that the dollar is the currency of choice for most transactions involving the United States. The dollar is also extensively used as a vehicle currency in international trade flows that do not directly involve the United States. Consistent with the results of our model, this last finding is largely attributable to international trade in reference-priced and organized-exchange traded goods. Although the magnitude of business-cycle volatility matters for invoicing of more differentiated products, it is less central for invoicing nondifferentiated goods"--NBER website
The International Role Of The Dollar And Trade Balance Adjustment
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Author : Linda S. Goldberg
language : en
Publisher:
Release Date : 2006
The International Role Of The Dollar And Trade Balance Adjustment written by Linda S. Goldberg and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Business & Economics categories.
The pattern of international trade adjustment is affected by the continuing international role of the dollar and related evidence on exchange rate pass-through into prices. This paper argues that a depreciation of the dollar would have asymmetric effects on flows between the United States and its trading partners. With low exchange rate pass-through to U.S. import prices and high exchange rate pass-through to the local prices of countries consuming U.S. exports, the effect of dollar depreciation on real trade flows is dominated by an adjustment in U.S. export quantities, which increase as U.S. goods become cheaper in the rest of the world. Real U.S. imports are affected less because U.S. prices are more insulated from exchange rate movements -- pass-through is low and dollar invoicing is high. In relation to prices, the effects on the U.S. terms of trade are limited: U.S. exporters earn the same amount of dollars for each unit shipped abroad, and U.S. consumers do not encounter more expensive imports. Movements in dollar exchange rates also affect the international trade transactions of countries invoicing some of their trade in dollars, even when these countries are not transacting directly with the United States.
The Vehicle Currency Invoicing Of Trade And Exchange Rate Pass Through
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Author : Daniel Stephen Dorrow
language : en
Publisher:
Release Date : 1987
The Vehicle Currency Invoicing Of Trade And Exchange Rate Pass Through written by Daniel Stephen Dorrow and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1987 with categories.
The Financing Procedures Of British Foreign Trade
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Author : Stephen Carse
language : en
Publisher: CUP Archive
Release Date : 1980-07-31
The Financing Procedures Of British Foreign Trade written by Stephen Carse and has been published by CUP Archive this book supported file pdf, txt, epub, kindle and other format this book has been release on 1980-07-31 with Business & Economics categories.
Dominant Currencies And External Adjustment
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Author : Gustavo Adler
language : en
Publisher: International Monetary Fund
Release Date : 2020-07-20
Dominant Currencies And External Adjustment written by Gustavo Adler 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 2020-07-20 with Business & Economics categories.
The extensive use of the US dollar when firms set prices for international trade (dubbed dominant currency pricing) and in their funding (dominant currency financing) has come to the forefront of policy debate, raising questions about how exchange rates work and the benefits of exchange rate flexibility. This Staff Discussion Note documents these features of international trade and finance and explores their implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.
Dominant Currency Paradigm A New Model For Small Open Economies
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Author : Camila Casas
language : en
Publisher: International Monetary Fund
Release Date : 2017-11-22
Dominant Currency Paradigm A New Model For Small Open Economies written by Camila Casas 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 2017-11-22 with Business & Economics categories.
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.
Essays On International Currency
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Author : Tao Liu
language : en
Publisher:
Release Date : 2017
Essays On International Currency written by Tao Liu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
This dissertation explores the issue of international currency with monetary search theory, recently available dataset, and state-of-the-art empirical methodology. The first chapter is focused on the currency choice in international trade. Previous literature normally emphasized economy size and openness, but that couldn't explain why RMB remains national while China is already leading in international trade. The role of financial development is highlighted. First, an empirical study with SWIFT dataset verifies the importance of financial development. Then a two-country monetary search model is built, in which trade takes time, and the lack of commitment makes exporter and importer rely on bank-intermediated finance. The agent's currency choice is related with terms of trade, monetary policy, and financial efficiency. Optimal monetary policy differs according to currency regime. Related topics such as size effect and global imbalance are also discussed. The second chapter provides firm-level evidence. In theory part, the monetary search model is streamlined to focus on the choice of exporter and synthesize the macro, micro, and financial factors into a unified framework. In empirical part, it is found that financial factors significantly affect the patterns of currency usage, and exporters prefer the currency with a more developed financial market, especially for small firms in financial vulnerable sectors. Meanwhile, bad monetary policy and low bargaining power will hurt the popularity of currency, although empirically bargaining power has only a secondary effect. The third chapter further investigates the currency choice in financial transaction. With SWIFT dataset, a gravity equation is estimated to explain the geographical distribution of international currency. For major currencies, economic integration and stable macroeconomic condition increase their international use. Specifically, trade and portfolio investment are more helpful in raising the direct use, while FDI works better in promoting the vehicle use. For RMB, trade improves the intensity of its use, and FDI increases its user number. The policy effect on RMB internationalization is significant only in enhancing the intensity of its direct use. Additionally, major currencies experience death of distance, whereas RMB use decreases in geographical distance, implying its role to be more regional during this period.
The Japanese Yen As An International Currency
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Author : Mr.George S. Tavlas
language : en
Publisher: International Monetary Fund
Release Date : 1991-01-01
The Japanese Yen As An International Currency written by Mr.George S. Tavlas 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 1991-01-01 with Business & Economics categories.
The role of the Japanese yen as an international currency is assessed. It is found that the determinants of international-currency use imply some increase for the yen’s use in international finance; however, the implications for the yen’s use in international trade are mixed. It is also shown that, despite Japan’s emergence as the world’s largest net creditor nation, Japan’s capital outflows have not significantly facilitated the yen’s internationalization. Data are presented showing that, although the yen’s use as an international currency has increased, it is still rather modest. Wider use of the yen as a regional currency in Asia has occurred, though a “yen-zone” does not appear to be emerging.
Patterns In Invoicing Currency In Global Trade
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Author : Emine Boz
language : en
Publisher:
Release Date : 2020-07-17
Patterns In Invoicing Currency In Global Trade written by Emine Boz and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-07-17 with categories.
This paper presents the most comprehensive and up-to-date panel data set of invoicing currencies in global trade. It provides data on the shares of exports and imports invoiced in US dollars, euros, and other currencies for more than 100 countries since 1990. The evidence from these data confirms findings from earlier research regarding the globally dominant role of the US dollar in invoicing - despite the comparatively smaller role of the US in global trade - and the overall stability of invoicing currency patterns. The evidence also points to several novel facts. First, both the US dollar and the euro have been increasingly used for invoicing even as the share of global trade accounted for by the US and the euro area has declined. Second, the euro is used as a vehicle currency in parts of Africa, and some European countries have seen significant shifts toward euro invoicing. Third, as suggested by the dominant currency paradigm, countries invoicing more in US dollars (euros) tend to experience greater US dollar (euro) exchange rate pass-through to their import prices; also, their trade volumes are more sensitive to fluctuations in these exchange rates.