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The Real Exchange Rate, Mercantilism and the Learning by Doing Externality
Aizenman, Joshua - 2008
This paper examines the degree to which the learning by doing externality [LBD] calls for an undervalued exchange rate, a policy suggested by recent empirical studies which concluded that mildly undervalued real exchange rate may enhance growth. We obtain mixed results. For an economy where LBD...
Persistent link: https://www.econbiz.de/10012772382
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Real Exchange Rate Movements and the Relative Price of Non-Traded Goods
Betts, Caroline - 2009
We study the quarterly bilateral real exchange rate and the relative price of non-traded to traded goods for 1225 country pairs over 1980-2005. We show that the two variables are positively correlated, but that movements in the relative price measure are smaller than those in the real exchange...
Persistent link: https://www.econbiz.de/10012765991
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Global Value Chains and Effective Exchange Rates at the Country-Sector Level
Patel, Nikhil - 2014
The real effective exchange rate (REER) is one of the most cited statistical constructs in open-economy macroeconomics. We show that the models used to compute these numbers are not rich enough to allow for the rising importance of global value chains. Moreover, because different sectors within...
Persistent link: https://www.econbiz.de/10013052107
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International Risk Sharing and the Choice of Exchange-Rate Regime
Hsieh, David A. - 2021
-country overlapping generations model, where markets are incomplete under either exchange regime. In this second best world, it is …
Persistent link: https://www.econbiz.de/10013232193
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Exchange Rates in Emerging Economies : What Do We Know? What Do We Need to Know?
Edwards, Sebastian; Savastano, Miguel A. - 2021
Exchange rates have been at the center of economic debates in emerging economies. Issues related to the feasibility of flexible exchange rates, the relationship between exchange rate volatility and growth, and the role of exchange rate overvaluation in recent crises, among other, have been...
Persistent link: https://www.econbiz.de/10013235601
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Capital Flows, the Current Account, and the Real Exchange Rate : Consequences of Liberalization and Stabilization
Obstfeld, Maurice - 2021
This paper develops a dynamic framework in which macroeconomic liberalization and stabilization measures of the type recently seen in Latin America can be studied. The model is sufficiently general to cover both polar cases of a closed capital account and free private capital mobility, so the...
Persistent link: https://www.econbiz.de/10013243955
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The Micro-Macro Disconnect of Purchasing Power Parity
Bergin, Paul R. - 2010
This paper reconciles the persistence of aggregate real exchange rates with the faster adjustment of international relative prices in microeconomic data. Panel estimation of an error correction model using a micro data set uncovers new stylized facts regarding this puzzle. First, adjustment to...
Persistent link: https://www.econbiz.de/10013149574
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Measuring Uncertainty
Jurado, Kyle - 2013
This paper exploits a data rich environment to provide direct econometric estimates of time-varying macroeconomic uncertainty, defined as the common volatility in the unforecastable component of a large number of economic indicators. Our estimates display significant independent variations from...
Persistent link: https://www.econbiz.de/10013075857
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Dating the Integration of World Equity Markets
Bekaert, Geert - 2008
Measuring the integration of world capital markets is notoriously difficult. For example, regulatory changes which … equity market becomes financially integrated with world capital markets. We find endogenous break dates that are very … markets are on average larger and more liquid than before; returns are more volatile and more highly correlated with the world …
Persistent link: https://www.econbiz.de/10012774881
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Answering the Critics : Yes, Arch Models Do Provide Good Volatility Forecasts
Andersen, Torben G. - 2008
Volatility permeates modern financial theories and decision making processes. As such, accurate measures and good forecasts of future volatility are critical for the implementation and evaluation of asset pricing theories. In response to this, a voluminous literature has emerged for modeling the...
Persistent link: https://www.econbiz.de/10012774886