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Does Competition between Currencies Lead to Price Level and Exchange Rate Stability?
Woodford, Michael - 2007
Over the past century, the world economy has passed through a succession of phases characterized by very different levels of international capital flows. This paper asks what accounts for these dramatic shifts in the extent of capital movements across national borders, three categories of...
Persistent link: https://www.econbiz.de/10012776702
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The Real Exchange Rate and Foreign Direct Investment in the United States : Relative Wealth vs. Relative Wage Effects
Klein, Michael W. - 2010
There has been a significant correlation between United States inward foreign direct investment and the United States real exchange rate since the 1970s. Two alternative reasons for this relationship are that the real exchange rate affects the relative cost of labor and that the real exchange...
Persistent link: https://www.econbiz.de/10013134977
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Exchange Rates and Local Labor Markets
Goldberg, Linda S. - 2010
We document the consequences of real exchange rate movements for the employment, hours, and hourly earnings of workers in manufacturing industries across individual states. Exchange rates have statistically significant wage and employment implications in these local labor markets. The importance...
Persistent link: https://www.econbiz.de/10013137198
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Ownership Characteristics, Real Exchange Rate Movements and Labor Market Adjustment in China
Mao, Risheng - 2011
This paper uses a firm level multi-industry data set covering 456 Chinese manufacturing sectors to assess the implications of Renminbi (RMB) real exchange rate appreciation for adjustments in employment and wage rates. We stress differences in both industry and firm characteristics within...
Persistent link: https://www.econbiz.de/10013118843
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Consumption Risk-Sharing and the Real Exchange Rate : Why Does the Nominal Exchange Rate Make Such a Difference?
Devereux, Michael B. - 2011
A basic prediction of effcient risk-sharing is that relative consumption growth rates across countries or regions should be positively related to real exchange rate growth rates across the same areas. We investigate this hypothesis, employing a newly constructed multi-country and multi-regional...
Persistent link: https://www.econbiz.de/10013121595
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The Real Exchange Rate, Real Interest Rates, and the Risk Premium
Engel, Charles M. - 2011
The well-known uncovered interest parity puzzle arises from the empirical regularity that, among developed country pairs, the high interest rate country tends to have high expected returns on its short term assets. At the same time, another strand of the literature has documented that high real...
Persistent link: https://www.econbiz.de/10013123979
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Exchange Rate Models are Not as Bad as You Think
Engel, Charles M. - 2012
Standard models of exchange rates, based on macroeconomic variables such as prices, interest rates, output, etc., are thought by many researchers to have failed empirically. We present evidence to the contrary. First, we emphasize the point that "beating a random walk" in forecasting is too...
Persistent link: https://www.econbiz.de/10013106155
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Monetary Policy and the Predictability of Nominal Exchange Rates
Eichenbaum, Martin - 2017
inflation rates in shaping the response of real exchange rates to shocks. We document two facts about inflation … rate is a poor predictor of future inflation rates. We estimate a medium-size DSGE open-economy model that accounts … that accounts for the dynamics of exchange rates and their covariance with inflation are disturbances to the foreign demand …
Persistent link: https://www.econbiz.de/10012963169
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Explaining the Effects of Government Spending Shocks on Consumption and the Real Exchange Rate
Ravn, Morten O. - 2007
Using panel structural VAR analysis and quarterly data from four industrialized countries, we document that an increase in government purchases leads to an expansion in output and private consumption, a deterioration in the trade balance, and a depreciation of the real exchange rate (i.e., a...
Persistent link: https://www.econbiz.de/10012776197
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Commodity Export Prices and the Real Exchange Rate in Developing Countries : Coffee in Colombia
Edwards, Sebastian - 2007
, inflation, and the real exchange rate in a developing country is developed. The model is then tested using data for Colombia. A … inflation. The results obtained indicate that coffee price changes have indeed been closely related to money creation and … inflation. Also, coffee price changes have been negatively related to the rate of devaluation of the crawling peg. These results …
Persistent link: https://www.econbiz.de/10012777342