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Real Exchange Rate Misalignments and Growth

Razin, Ofair; Collins, Susan M. - 2022

Real exchange rate (RER) misalignment is now a standard concept in international macroeconomic theory and policy …

Persistent link: https://www.econbiz.de/10013321576

Real Exchange Rate Policies for Economic Development

Guzman, Martin - 2017

This paper analyzes the role of real exchange rate (RER) policies in promoting economic development. Markets provide a suboptimal amount of investment in sectors characterized by learning spillovers. We show that a stable and competitive RER policy may correct for this externality and other...

Persistent link: https://www.econbiz.de/10012946498

Fiscal Deficits, Exchange Rate Crises and Inflation

van Wijnbergen, Sweder - 2021

reforms may cause jumps in inflation and the exchange rate through their impact on the government budget. In order to achieve … a sustainable reduction in inflation an exchange rate freeze or crawling peg is shown to require restrictions not only …-collapse inflation will exceed the rate prevailing before the freeze started …

Persistent link: https://www.econbiz.de/10013246289

On the Empirics of Sudden Stops : The Relevance of Balance-Sheet Effects

Calvo, Guillermo A.; Izquierdo, Alejandro; Mejia, … - 2021

Using a sample of 32 developed and developing countries we analyze the empirical characteristics of sudden stops in capital flows and the relevance of balance sheet effects in the likelihood of their materialization. We find that large real exchange rate (RER) fluctuations coming hand in hand...

Persistent link: https://www.econbiz.de/10013210631

The Long-Run Volatility Puzzle of the Real Exchange Rate

Hausmann, Ricardo; Rigobon, Roberto; Panizza, Ugo - 2021

This paper documents large cross-country differences in the long run volatility of the real exchange rate. In particular, it shows that the real exchange rate of developing countries is approximately three times more volatile than the real exchange rate in industrial countries. The paper tests...

Persistent link: https://www.econbiz.de/10013227521

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

Expenditure Switching vs. Real Exchange Rate Stabilization : Competing Objectives for Exchange Rate Policy

Devereux, Michael B. - 2009

This paper develops a view of exchange rate policy as a trade-off between the desire to smooth fluctuations in real exchange rates so as to reduce distortions in consumption allocations, and the need to allow flexibility in the nominal exchange rate so as to facilitate terms of trade adjustment....

Persistent link: https://www.econbiz.de/10012767336

Optimal Capital Controls and Real Exchange Rate Policies : A Pecuniary Externality Perspective

Benigno, Gianluca - 2016

A new theoretical literature studies the use of capital controls to prevent financial crises in models in which pecuniary externalities justify government intervention. Within the same theoretical framework, we show that when ex-post policies such as defending the exchange rate can contain or...

Persistent link: https://www.econbiz.de/10012992657

Two Notes on Exchange Rate Rules and on the Real Value of External Debt

Dornbusch, Rudiger - 2021

This report presents two unrelated, short papers on exchange rate rules and on the real value of the external debt. The paper on exchange rate policy uses the Taylor model of overlapping, long term wage contracts to ask whether accommodating or PPP oriented exchange rate policies tend to...

Persistent link: https://www.econbiz.de/10013218828

Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based-Stabilizations

Burstein, Ariel T.; Neves, Joao C.; Rebelo, Sergio T. - 2021

This paper studies the role played by the distribution sector in shaping the behavior of the real exchange rate during exchange-rate-based-stabilizations. We use data for the U.S. and Argentina to document the importance of distribution margins in retail prices and disaggregated price data to...

Persistent link: https://www.econbiz.de/10013221936

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