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The real exchange rate in the long run : Balassa-Samuelson effects reconsidered

Bordo, Michael D.; Choudhri, Ehsan U.; Fazio, Giorgio; … - 2014

Historical data for over hundred years and 14 countries is used to estimate the long-run effect of productivity on the … real exchange rate. We find large variations in the productivity effect across four distinct monetary regimes in the sample … argue that changes in trade costs over time may affect the impact of productivity on the real exchange rate over time. We …

Persistent link: https://www.econbiz.de/10010374513

A re-examination of the link between real exchange rates and real interest rate differentials

Hoffmann, Mathias; MacDonald, Ronald - 2003

The real exchange rate - real interest rate (RERI) relationship is central to most open economy macroeconomic models. However, empirical support for the relationship, especially when cointegrationbased methods are used, is rather weak. In this paper we reinvestigate the RERI relationship using...

Persistent link: https://www.econbiz.de/10011506475

Pegxit pressure : evidence from the classical gold standard

Mitchener, Kris; Pina, Gonçalo - 2016

We develop a simple model that highlights the costs and benefits of fixed exchange rates as they relate to trade, and show that negative export-price shocks reduce fiscal revenue and increase the likelihood of an expected currency devaluation. Using a new high-frequency data set on...

Persistent link: https://www.econbiz.de/10011568741

Reconsidering the price-income relationship across countries

Fujii, Eiji - 2013 - This version: February 2013

positive price-income association is attributable, at least partly, to the Balassa-Samuelson productivity differential effect …

Persistent link: https://www.econbiz.de/10009707555

'Large' vs. 'small' players : a closer look at the dynamics of speculative attacks

Bjønnes, Geir H.; Holden, Steinar; Rime, Dagfinn; … - 2009

What is the role of large playersʺ like hedge funds and other highly leveraged institutions in speculative attacks? In recent theoretical work, large players may induce an attack by an early move, providing information to smaller agents. In contrast, many observers argue that large players are...

Persistent link: https://www.econbiz.de/10003806083

Monetary policy, model uncertainty and exchange rate volatility

Markiewicz, Agnieszka - 2010

This paper proposes an explanation of the shifts in the volatility of exchange rate returns that relies on standard present value exchange rate models. Agents are uncertain about the true data generating model and deal with the model uncertainty by making inference on the models and their...

Persistent link: https://www.econbiz.de/10003937806

The impact of fiscal rules on public finances : theory and empirical evidence for the Euro area

Marneffe, Wim; Aarle, Bas van; Wielen, Wouter van der; … - 2010

This paper presents a review of the most significant fiscal rules policymakers can choose from. The insights from this review are then applied to the current budgetary situation of the European Union. In the European Union, the supranational Stability and Growth Pact (SGP) should provide the...

Persistent link: https://www.econbiz.de/10008808242

Exchange rate misalignment : the case of the Chinese Renminbi

Cheung, Yin-Wong - 2012

Assessing exchange rate misalignment is not an easy task. With reference to the debate on the value of China's currency, the renminbi (RMB), this article highlights a few challenges in properly assessing the extent of currency misalignment. The results derived from the fundamental equilibrium...

Persistent link: https://www.econbiz.de/10009533965

Dissecting the PPP puzzle : the unconventional roles of nominal exchange rate and price adjustment

Cheung, Yin-Wong; Lai, Kon-sun; Bergman, Michael U. - 2003

The conventional view, as expounded by sticky-price models, is that price adjustment determines the PPP reversion rate. This study examines the mechanism by which PPP deviations are corrected. Nominal exchange rate adjustment, not price adjustment, is shown to be the key engine governing the...

Persistent link: https://www.econbiz.de/10011507767

Transatlantic monetary and fiscal policy interaction

Aarle, Bas van; Garretsen, Harry; Huart, Florence - 2003

This paper studies the design, effects and interactions of monetary and fiscal policies in the euro-area and between the euro-area and the non euro-area. To do so, a stylized three-country model of monetary and fiscal policy rules is constructed. It is analyzed how monetary and fiscal rules...

Persistent link: https://www.econbiz.de/10011509484

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