For a better understanding of the ongoing debates on the RMB, this paper investigates the effects of exchange rate shocks on output and the current account for China and Japan. We use structural vector auto-regression models and find that yen appreciation reduces current account surpluses while...

This paper investigates international macroeconomic fluctuations in light of NOEM (New Open Economy Macroeconomics) models. A model with four major economic disturbances (technology shocks, labor supply shocks, preference shocks, and nominal shocks) is analytically solved to derive theoretical...

This Paper analyzes the role of real disturbances in the real dollar exchange rates of the mark, yen and the pound both during the post-1973 float and in the long-run historical date. The results indicate dominate roles of real shocks in all three exchange rates in the post-1973 float although a...

This paper utilizes cointegration analysis to examine purchasing power parity relationships over a long-time horizon. The results indicate that the exchange rate is cointegrated strongly with the wholesale price index ratio and somewhat weakly with the consumer price index ratio. The...

Throughout the turbulence in the international financial system, eastern Caribbean countries have enjoyed remarkable monetary and economic stability. This paper attempts to characterize the types of structural shocks in the Eastern Caribbean Currency Union (ECCU) and other countries in the...

International monetary policy trilemma—the tradeoff among exchange rate stability, monetary independence, and unrestricted capital mobility—is an important constraint for policy makers in an open economy. This paper investigates an aspect of the hypothesis that has received relatively less...