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East Asia and global imbalances: Saving, investment, and financial development

Ito, Hiro; Chinn, Menzie - 2007

We investigate the role of budget balances, financial development and openness, in the evolution of global imbalances. Financial development or the lack thereof has received considerable attention as a possible contributing factor to the development of persistent and expanding current account...

Persistent link: https://www.econbiz.de/10010285341

How Does Monetary Policy Respond to Exchange Rate Movements? New International Evidence

Bjørnland, Hilde C.; Halvorsen, Jørn Inge - 2008

This paper analyzes how monetary policy responds to exchange rate movements in open economies, paying particular attention to the two-way interaction between monetary policy and exchange rate movements. We address this issue using a structural VAR model that is identified using a combination of...

Persistent link: https://www.econbiz.de/10012143695

Monetary Policy and Exchange Rate Overshooting: Dornbusch Was Right After All

Bjørnland, Hilde C. - 2009

Dornbusch's exchange rate overshooting hypothesis is a central building block in international macroeconomics. Yet …, empirical studies of monetary policy have typically found exchange rate effects that are inconsistent with overshooting. This … the Dornbusch overshooting hypothesis and with few exceptions consistent with UIP. …

Persistent link: https://www.econbiz.de/10012143714

Capital flows and the Swiss franc

Yeșin, Pınar - 2016

The Swiss franc is known to appreciate strongly during financial market turmoil, demonstrating its status as a typical safe haven currency. One possible mechanism behind this appreciation during times of global turmoil is assumed to be higher capital inflows to Switzerland. This paper attempts...

Persistent link: https://www.econbiz.de/10011629988

Unconventional monetary policy under appreciation pressure: The role of financial frictions

Aregger, Nicole; Leutert, Jessica - 2017

We build a two-country model with imperfect financial intermediation. Banks face limits to arbitrage which lead to positive excess returns in the investment markets and a risk premium in the international credit market. Gross capital flows affect the exchange rate since banks are balance sheet...

Persistent link: https://www.econbiz.de/10011961432

Assessment of the Impact of Fiscal Policy on the Current Account – the Twin Deficit Hypothesis in the Case of Macedonian Economy

Stojcevska, Vesna; Miteski, Mite - 2016

For a small open economy with fixed exchange rate regime, the twin deficit hypothesis is always an interesting and relevant research topic. The aim of this research is to evaluate the effects of the government budget shocks on the current account movement in the case of the Macedonian economy,...

Persistent link: https://www.econbiz.de/10011785359

The Optimal Level of Foreign Reserves in Macedonia

Jovanovikj, Biljana; Andonova, Danica Unevska - 2017

During the last two decades the emerging countries have experienced an upward trend in reserve accumulation. However, high level of foreign reserve assets implies certain costs. Consequently, given the trade-off between the benefits and the costs of holding reserves, there are issues related to...

Persistent link: https://www.econbiz.de/10011785368

Is the Rupee over-valued?

Bhagwati, Jaimini; Barua, Abheek; Khan, M. Shuheb - 2015

The paper's objective is to examine whether the Indian Rupee was fairly valued as of end March 2015. First, the movements of the trade weighted real effective exchange rate (REER) of the Rupee are tracked over the last ten years. Next, the underpinnings of the Harrod-Balassa-Samuelson effect,...

Persistent link: https://www.econbiz.de/10011807710

Booms and busts in Latin America: The role of external factors

Izquierdo, Alejandro; Romero, Randall; Talvi, Ernesto - 2008

This paper analyzes the relevance of external factors in average quarterly GDP growth for 1990-2006 in the seven largest Latin American countries (LAC7). Modeling the relationship between LAC7 GDP and several external factors, it is found that those factors account for a significant share of...

Persistent link: https://www.econbiz.de/10010278267

Systemic sudden stops: The relevance of balance-sheet effects and financial integration

Calvo, Guillermo A.; Izquierdo, Alejandro; Mejía, … - 2008

Using a sample of 110 developed and developing countries for the period 1990-2004, this paper analyzes the characteristics of systemic sudden stops (3S) in capital flows and the relevance of balance-sheet effects in the likelihood of their materialization. A small supply of tradable goods...

Persistent link: https://www.econbiz.de/10010278271