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We examine the role of the exchange and interest rate channels during recent deflation episodes in Japan, Hong Kong and China. We estimate open-economy structural vector autoregressive (SVAR) models for the three economies with different monetary regimes and varying degrees of openness. In both...
Persistent link: https://www.econbiz.de/10014225267
of the daily percentage change in the S&P 500 on the TIPS spread measuring inflation expectations show little correlation … between asset prices and expected inflation from 2003 until early 2008. However, since early 2008 the correlation between … changes in stock prices and in inflation expectations has been strongly positive and statistically significant …
Persistent link: https://www.econbiz.de/10013093920
), the problem of instability is simply transferred to inflation rate differentials, what we call the (impossibility of the …) "uncovered inflation rate parity condition" in a monetary union. The analysis of the actual divergences and imbalances in the EMU …, then, suggests that failure to respect the "uncovered inflation rate parity condition" in a monetary union may lead to …
Persistent link: https://www.econbiz.de/10011926988
interest rate, the study found evidence for the popular Fisher's effect and, then, suggested that inflation targeting should be …
Persistent link: https://www.econbiz.de/10014547759
The implementation of economic reforms under new economic policies in India was associated with a paradigmatic shift in monetary and fiscal policy. While monetary policies were solely aimed at "price stability" in the neoliberal regime, fiscal policies were characterized by the objective of...
Persistent link: https://www.econbiz.de/10010385761
The purpose of this study is to find the effect of the exchange rate, Gross Domestic Product (GDP), inflation, and the …), inflation has a negative but insignificant effect on DDI, while the interest rate regression coefficient has a positive sign … significant effect on DDI in Indonesia in the period of 2000-2018. Each inflation and IDR/US $ exchange rate has a negative and …
Persistent link: https://www.econbiz.de/10013247151
interest rate, the study found evidence for the popular Fisher's effect and, then, suggested that inflation targeting should be …
Persistent link: https://www.econbiz.de/10012429646
inflation targeting policy of setting union-wide inflation to zero is never optimal. Second, the interactions lead to a trade … inefficiencies by mitigating the drop in output and inflation and the rise in relative consumption and prices. Such a policy response …
Persistent link: https://www.econbiz.de/10013035757
This paper analyses the optimal monetary policy under incomplete exchange rate pass-through and asymmetric price rigidity. In a general equilibrium sticky price model of an open economy we find that the optimal interest rate rule is to respond to all types of shocks in an economy: real exchange...
Persistent link: https://www.econbiz.de/10014216924
The study examines the impact of interest rate differential and exchange rate move-ment on the dynamics of Nigeria's international private capital flows from 2010Q1to 2019Q4. It uses the interest rate parity theory and the Markov Switching TimeVarying Transition Probability Modelling approach....
Persistent link: https://www.econbiz.de/10012513274