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1.
In a fixed exchange rate regime, an exchange rate change can be a swift way to change the real exchange rate in the short
run. Fiscal policy also affects relative prices, and fiscal policy response to various types of shocks can therefore be crucial
for the credibility of an exchange rate peg. We develop a model within which fiscal policy plays a crucial role for ensuring
the viability and thus credibility of an exchange rate peg. We use the insights of this model to take a closer look at Denmark,
which has successfully pursued a fixed exchange rate policy since 1982.
相似文献
Torben M. AndersenEmail: |
2.
An updated version of Krugman’s 1993 MMF framework is used to consider the implications of buoyant domestic demand for the
real exchange rate and debt dynamics. The updating includes a Taylor rule for monetary policy and explicit treatment of external
assets and liabilities. In response to an exogenous rise in the aggregate demand, short-run appreciation of the real exchange
rate is followed by a prolonged decline as external debt accumulates and net wealth deteriorates. Whether in equilibrium the
real exchange rate is stronger or weaker depends crucially on a comparison of real interest rates and the growth rate. If
the domestic growth rate is higher than global real interest rates, the currency may strengthen in the long run despite the
deterioration of net external assets. To see whether the strength of sterling is sustainable, the analysis is briefly calibrated
to UK data over the last decade. Blanchard et al. (The US current account and the dollar. CEPR DP no 4888, 2005) suggest that international liabilities to be treated as imperfect substitutes: so we check to see how this would affect
our results.
相似文献
Eleni IliopulosEmail: |
3.
The recent rash of international currency crises has generated considerable interest in the role that exchange rate regimes
have played in contributing to these crises. Many economists have argued that efforts to operate adjustably pegged exchange
rate regimes have been a major contributor to “the unstable middle” hypothesis and some have argued that this unstable middle
is so broad that only the two corners of hard fixes or floating rates will be stable in a world of high capital mobility—the
two corners or bipolar hypothesis. Two recent empirical studies by researchers at the International Monetary Fund reach opposing
conclusions on these issues. We examine the issue further and show that conclusions can be quite sensitive to how exchange
rate regimes are grouped into categories and the measures of currency crises that are used. In general we find that the dead
center of the adjustable peg is by far the most crisis prone broad type of exchange rate regimes, but that countries need
not go all the way to freely floating rates or hard fixes to substantially reduce the risks of currency crises.
相似文献
Thomas D. WillettEmail: |
4.
Non-traded Goods,Technical Progress and Wages 总被引:2,自引:0,他引:2
We use a general equilibrium model of trade to show that technical improvement may indeed cause a fall in the wages of unskilled
workers. Under some modest conditions, the wages of skilled workers may go down too.
相似文献
Reza OladiEmail: |
5.
Francisco Ledesma-Rodríguez Jorge Pérez-Rodríguez Simón Sosvilla-Rivero 《International Economics and Economic Policy》2009,6(2):179-206
This paper attempts to identify implicit exchange rate regimes for currencies of the Central and Eastern European Countries
vis-à-vis the euro. To that end, we apply a sequential procedure that considers the dynamics of exchange rates to data covering the
period from 1977:01 to 2006:02. Our results would suggest that implicit bands have existed in many subperiods for almost all
currencies under study. Once we detect de facto discrepancies between de facto and de iure exchange rate regimes, we propose a model in order to explain these decisions. Our results suggest a positive association
between the previous inflation rate and the probability of a peg with the euro, and a negative association with past unemployment
rate.
相似文献
Simón Sosvilla-RiveroEmail: |
6.
Juha Tervala 《International Economics and Economic Policy》2008,5(3):255-268
This paper analyses the welfare effects of fiscal policy in a small open economy, where private and government consumption
are substitutes in terms of private utility. The main findings are as follows: fiscal policy raises output, bringing it closer
to its efficient level, but is not welfare-improving even though government spending directly affects private utility. The
main reason for this is that the introduction of useful government spending implies a larger crowding-out effect on private
consumption, when compared with the ‘pure waste’ case. Utility decreases since one unit of government consumption yields less
utility than one unit of private consumption. In any case, the marginal rate of substitution between private and government
consumption is a key parameter in governing the welfare effects of fiscal policy.
相似文献
Juha TervalaEmail: |
7.
In this study, we attempt to examine the possibility of emergence of significant fluctuations of the exchange rates in the
future for the candidate EMU countries. In doing so, we estimate the equilibrium rate of the nominal effective exchange rate
for Poland, Hungary, Slovak Republic and Malta through the BEER and PEER approaches. While the PEER-based estimation implies
a large misalignment rate for the Hungarian forint, the BEER-based analysis shows that the present exchange rates of the countries
considered do not deviate significantly from their equilibrium rates. As a consequence, based on BEER analysis, we do not
expect large fluctuations in the effective exchange rates among the currencies considered. Hence, the relevant effective exchange
rates are expected to be relatively stable. As a matter of fact, the entry of those countries into EMU is not expected to
weaken the stability of Euro.
相似文献
Nikolaos GiannellisEmail: |
8.
Bernd Schnatz 《International Economics and Economic Policy》2007,4(3):281-297
The paper tests for nonlinearities in the adjustment of the euro exchange rate towards purchasing power parity (PPP). It presents
new survey based evidence consistent with non-linear patterns in euro exchange rate dynamics. Moreover, based on an exponential
smooth transition autoregressive (ESTAR-) model, it finds strong evidence that the speed of mean reversion in euro exchange
rates increases non-linearly with the magnitude of the PPP deviation. Accordingly, while the euro real exchange rate can be
well approximated by a random walk if PPP deviations are small, in periods of significant deviations, gravitational forces
are set to take root and bring the exchange rate back towards its long-term trend. Deviations from the PPP equilibrium for
the euro-dollar rate need to be stronger in order to reach the same adjustment intensity as for other rates.
相似文献
Bernd SchnatzEmail: |
9.
Shocks to Terms of Trade and Risk-premium in an Intertemporal Model: The Dutch Disease and a Dutch Party 总被引:1,自引:1,他引:0
In this paper, we analyze the impact of terms of trade and risk-premium shocks on a small open economy in an intertemporal
Dutch disease model, with international capital mobility. Given that an improvement in the terms of trade is associated with
a decrease in the risk-premium on lending to this economy, we find that this can lead to a Dutch party (rather than Dutch
disease) in which real exchange rate appreciation is associated with an expansion of the capital-intensive traded sector,
hence, pro-industrialization. The economy also accumulates more debt in the long-run in response to the lower borrowing costs.
相似文献
David Vines (Corresponding author)Email: |
10.
This paper investigates how innovations in income taxes and government expenditures originating in the US affect the US economy,
and how these effects are transmitted to the Canadian economy. Using a semi-structural VAR model and data for both countries
for the 1961:1–2004:3 period, we find that fiscal policy innovations originating in the US are transmitted to the Canadian
economy by international trade and capital flows through interest rate and exchange rate channels. Unanticipated shocks to
US government expenditures have beggar thy neighbor effects on Canada. US output increases and Canadian output decreases in response to a positive shock to US government expenditures.
In response to an unanticipated increase in US income taxes, US output declines while US and Canadian real interest rates
rise. The response of Canadian output, however, is not significantly different from zero.
相似文献
Faik Koray (Corresponding author)Email: |
11.
Michael Bleaney 《Open Economies Review》2008,19(2):135-146
The puzzle that real exchange rates are less volatile in open economies is an important challenge to exchange rate theory.
Adjustment of domestic prices to nominal exchange rate movements can account for only a small proportion of this effect. Real
and nominal shocks display no obvious correlation with openness. It is shown here that real effective exchange rates are more
strongly mean-reverting in more open economies, even after controlling for exchange rate regime effects. This is predicted
by the theory of current account sustainability, because of its emphasis on ratios to GDP rather than to trade flows.
相似文献
Michael BleaneyEmail: |
12.
Policy coordination in East Asia and across the Pacific 总被引:1,自引:1,他引:0
In this paper, we construct a macro-econometric model that describes the economic activity in the Asia-Pacific area and provide
quantitative insights into the recent policy debates on monetary and currency coordination among the East Asian economies.
The model includes a wide variety of monetary and currency policy rules that the East Asian economies adopt and allows for
one country's policymaking to have substantial effects on foreign countries. We apply the model to three current policy issues:
(1) the desirability of currency basket pegs in East Asia, (2) the anticipated effects of China's currency policy reform,
and (3) the non-negativity constraint on Japanese nominal interest rates. The simulation analyses show the external economy
effects of policy rules quantitatively and suggest the difficulty of monetary and currency policy coordination among the East
Asian economies.
相似文献
Koichiro Kamada (Corresponding author)Email: |
Izumi TakagawaEmail: |
13.
This paper provides some of the first empirical evidence on labour market adjustments to exchange rate movements in Canadian
manufacturing industries. Controlling for endogeneity using generalized method of moments estimation, it is found that during
the 1981–1997 period, exchange movements have a substantial impact on labour input and that this impact has grown over time
as the manufacturing industries have become more exposed to trade. In contrast, the exchange rate effect on real wages is
estimated to be virtually zero for all manufacturing industries.
相似文献
Terence YuenEmail: |
14.
This paper studies to what extent the diversity of exchange rate regimes within Mercosur exerts an influence on the feasibility
of a monetary union in this area. A semi-structural vector autoregression model is built for each country, including a set
of international and domestic variables. Based on impulse response functions and forecast error decomposition, we conclude
that differences in exchange rate regimes explain significantly the divergences of economic dynamics triggered by foreign
or domestic shocks. Second, we decompose the structural innovations generated by each country model into unobservable common
and idiosyncratic components, using a state-space model. This last exercise, intended to assess the degree of policy coordination
between the Mercado Común del Sur members, did not disclose any common component for the structural innovations generated
by the three national models.
相似文献
Alain Sand-Zantman (Corresponding author)Email: |
15.
Two impediments to effective monetary policy operation include illiquidity in bond markets and the zero bound of interest
rates. Under these conditions alternative means of enacting monetary policy may be required. This paper empirically explores
policy options implemented through equity and currency markets that will generate similar inflation responses at different
time horizons. In terms of GDP loss the least costly means of achieving a particular long run inflation outcome is via the
current monetary policy arrangements. Currency market alternatives are volatile but less expensive than the equity market
in terms of output loss for short term inflation horizons.
相似文献
Renée FryEmail: |
16.
The Barcelona Initiative is the central element of the EU’s Mediterranean policy. We study the implementation of this policy
with respect to Syria using a dynamic general equilibrium model with credit constraints and capital market imperfections.
Dismantling formal tariffs has only limited effects on the Syrian economy, while reducing non-tariff barriers produces by
far larger results. EU association promises broadly positive effects for factor incomes and sectoral outputs, with some temporarily
negative effects in agricultural sectors. Nevertheless, we find evidence of severe trade distorting effects making preferential
trade policy clearly welfare inferior to multilateral trade liberalization within the WTO framework.
相似文献
Bernd LuckeEmail: |
17.
Kristin Langwasser 《International Economics and Economic Policy》2009,6(2):115-133
Although the euro area is not one of the major players in current global imbalances, the rebalancing of the current global
imbalances is coupled with a significant appreciation of the euro against. In this paper, I present estimations of trade equations
for individual euro area countries using a vector error correction model. Each euro area member has got a different trade
elasticity, in the short as well as in the short run. Results show that exchange rate innovations affect individual euro area
countries at different rates, complicating the response of the euro area’s one-size-fits-all monetary policy.
相似文献
Kristin LangwasserEmail: |
18.
We study the impact of Japanese foreign exchange intervention on the volatility of the yen/dollar exchange rate since the
early 1990’s in a GARCH framework with interventions as exogenous variables. Using daily intervention data provided by the
Japanese Ministry of Finance, we show that the effect of interventions varies over time. From 1991 up to the late 1990’s,
Japanese foreign exchange intervention is associated with an increase in volatility of the yen/dollar exchange rate. After
the year 1997, Japanese foreign exchange intervention correlates with reductions in exchange rate volatility. This can be
explained by the fact that Japanese foreign exchange intervention remained quasi unsterilized in the liquidity trap.
相似文献
Gunther SchnablEmail: |
19.
John Lewis 《International Economics and Economic Policy》2007,4(1):15-31
This paper analyses the evolution of fiscal policy in central and eastern European countries during the EU accession process,
testing for country and time specific effects. This is done by constructing Taylor-type policy rules and by calculating three
measures of fiscal stance. A key finding is that the differences across countries are more significant than those across time.
Baltic countries tended to have had tighter fiscal policy which responded to the output gap, larger central European countries
had more lax (and increasingly lax) fiscal policies which were unresponsive to the output gap. These differences correlate
closely with cross-country differences in exchange rate regimes and no link is found to either spending composition or political
variables. Taken together the results suggest that the exchange rate regime is by far the most significant determinant of
fiscal performance. These results suggest that the “soft power” of the prospect of EU entry did not act as a spur to greater
fiscal discipline and that higher budget deficits in recent years cannot be blamed on costs of accession.
相似文献
John LewisEmail: |
20.
Exchange Rate Economics 总被引:1,自引:0,他引:1
John Williamson 《Open Economies Review》2009,20(1):123-146
The paper summarizes the current theory of how a floating exchange rate is determined, dividing the subject into what determines
the steady state and what determines the transition to steady state. The inadequacies of this model are examined, and an alternative
“behavioral” model, which recognizes that the foreign exchange market is populated by both fundamentalists and chartists is
presented. It is argued that the main importance of understanding the foreign exchange market for development strategy is
to permit a correct appraisal of the dangers of Dutch disease. Empirically it seems that from the standpoint of promoting
development it is preferable to have a mildly undervalued rate. The paper concludes by examining implications for exchange
rate regimes.
相似文献
John WilliamsonEmail: |