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We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterfactual on how nominal exchange rate flexibility would have affected the German trade balance (TB) by simulating the shocks of the estimated model under a counterfactual flexible exchange rate regime....
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member countries in regard to economic policies, and ensuring smooth operation of a single market in the region. Two decades … of history confirm the stability of the euro as a single currency in the region and it is seen as a great achievement of …
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How do trade costs affect international trade? This paper offers a new approach. We rely on a flexible gravity equation that predicts variable trade cost elasticities, both across and within country pairs. We apply this framework to the effect of currency unions on international trade. While we...
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This paper studies the reaction of the mean and volatility of the euro-dollar exchange rate to statements of ECB … officials during the first years of EMU. We focus on statements on monetary policy and the (potential) strength of the euro. We …. In some cases there are effects of statements on the level of the euro-dollar rate. Efforts to talk up the euro have not …
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market participants. The model relies on a two states Markov switching framework: a bull state and a bear state. In the bull … leading to a depreciation of the domestic currency. Results show that market switches between a bull state and a bear state … explain the dynamics of the euro/dollar exchange rate between January 1995 and December 2008. Besides, the model highlights …
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