The response of the current account to monetary and fiscal shocks and real oil price shocks are examined using quarterly data for the United Kingdom over the flexible exchange rate period. We find statistical support for the existence of long-run asymmetries in the current account response to...

Arguments are put forward to challenge the case for a trade war between the U.S. and China. The threat of a trade war against China is based on three pillars: (i) the Chinese currency is undervalued, (ii) undervaluation of the yuan is the cause of and cure for the U.S. massive trade deficit, and...

Focusing on the 1992-93 crisis of the European Monetary System (Ems), I stress, in opposition with the conclusions reached by “escape clause” models, the role played by the availability of foreign reserves. In particular, I show the lack of credibility of the Bundesbank’s commitment to...

This study empirically investigates the role of trade policy along with physical capital, human capital and labour force on economic growth in an isolated economy (i.e. North Cyprus). We use a sample of quarterly and seasonally adjusted data covering the period 1978Q1-2002Q4 to evaluate whether...

We investigate long-run relations and short-run dynamics between China’s bilateral trade balance and real exchange rates with thirteen major trading partners over 1981-2008. Maximum likelihood tests of cointegration reveal no evidence of significant long-run relationship between the two...

Contrast to the BEER, PEER and FEER approaches, this paper develops a two-country model of monopolistic competition to re-examine whether the Chinese Renminbi is undervalued and to what extent it is undervalued. A testable equation that governs the equilibrium exchange rate of Renminbi is...

This study argues that the political considerations were an important factor behind the crisis of the Brazilian real in January 1999. The divided coalition government and a president facing impending elections eschewed the correction of external misalignments and the fiscal austerity at a time...

The paper seeks to analyze various contemporary theories in the measurement of real exchange rates and the associated problematics involved in each case particularly for a developing economy. It then focuses on the estimation of real exchange rate for the developing economy of Turkey using the...

This paper examines the experience of most Central and Southeastern European countries with respect to the exchange rate regimes they adopted. It first analyzes the exchange rate arrangements of these countries at the beginning of the transition process and how they relate to their initial...

The paper seeks to unfold some of the popular myths and realities concerning the recent financial crisis in the MIT (Malaysia-Indonesia-Thailand) countries. In this connection, it also analyses the various models of speculative attacks and their applicability, and the systemic implications of...