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Dissecting the PPP puzzle : the unconventional roles of nominal exchange rate and price adjustment
Cheung, Yin-Wong; Lai, Kon-sun; Bergman, Michael U. - 2003
The conventional view, as expounded by sticky-price models, is that price adjustment determines the PPP reversion rate. This study examines the mechanism by which PPP deviations are corrected. Nominal exchange rate adjustment, not price adjustment, is shown to be the key engine governing the...
Persistent link: https://www.econbiz.de/10011507767
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Exports and the exchange rate : a general equilibrium perspective
Alexander, Patrick; Reza, Abeer - 2022 - Last updated: April 4, 2022
aim of uncovering a single structural parameter, but theory suggests it could differ depending on the shock that drives … exports relative to the response of the exchange rate, conditional on each shock. Our findings suggest that this relationship … differs greatly from one shock to another, where domestic shocks generate a much weaker relationship than global shocks. We …
Persistent link: https://www.econbiz.de/10013172465
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Dissecting the PPP Puzzle : The Unconventional Roles of Nominal Exchange Rate and Price Adjustments
Cheung, Yin-Wong; Lai, Kon S.; Bergman, U. Michael - 2021
The conventional view, as expounded by sticky-price models, is that price adjustment determines the PPP reversion rate. This study examines the mechanism by which PPP deviations are corrected. Nominal exchange rate adjustment, not price adjustment, is shown to be the key engine governing the...
Persistent link: https://www.econbiz.de/10013319983
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Dissecting the PPP Puzzle : The Unconventional Roles of Nominal Exchange Rate and Price Adjustments
Research, Hong Kong Institute for Monetary and Financial - 2022
This working paper was written by Yin-wong Cheung (University of California, Santa Cruz), Kon S. Lai (California State University, Los Angeles) and Michael Bergman (Lund University).The conventional view, as expounded by sticky-price models, is that price adjustment determines the PPP reversion...
Persistent link: https://www.econbiz.de/10014048628
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Reconsidering the price-income relationship across countries
Fujii, Eiji - 2013 - This version: February 2013
This study reconsiders the well-known cross-country positive association between prices and income by focusing on heterogeneity between the inter-developed-country and inter-developing-country relationships. Empirical results reveal not only that developed and developing countries differ in...
Persistent link: https://www.econbiz.de/10009707555
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International investment positions and exchange rate dynamics
Binder, Michael; Offermanns, Christian J. - 2014
We revisit medium- to long-run exchange rate determination, focusing on the role of international investment positions. To do so, we make use of a new econometric framework accounting for conditional long-run homogeneity in heterogeneous dynamic panel data models. In particular, in our model the...
Persistent link: https://www.econbiz.de/10010414236
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Global Imbalances : Should We Use Fundamental Equilibrium Exchange Rates?
Saadaoui, Jamel - 2017
The reduction of global imbalances observed during the climax of crisis is incomplete. In this context, currencies' realignments are still proposed to ensure global macroeconomic stability. These realignments are based on equilibrium rates derived from equilibrium exchange rate models. Among...
Persistent link: https://www.econbiz.de/10012943656
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Equilibrium Real Exchange Rate Estimates Across Time and Space
Fischer, Christoph A. - 2019
Equilibrium real exchange rate and corresponding misalignment estimates differ tremendously depending on the panel estimation method used to derive them. Essentially, these methods differ in their treatment of the time-series (time) and the cross-section (space) variation in the panel. The study...
Persistent link: https://www.econbiz.de/10012869995
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International Investment Positions and Exchange Rate Dynamics : A Dynamic Panel Analysis
Binder, Michael - 2016
In this paper we revisit medium- to long-run exchange rate determination, focusing on the role of international investment positions. To do so, we develop a new econometric framework accounting for conditional long-run homogeneity in heterogeneous dynamic panel data models. In particular, in our...
Persistent link: https://www.econbiz.de/10012991132
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The Original Sin and Exchange Rate Dynamics : Panel Cointegration Evidence
Cain, Donneil - 2013
Developing country governments are often forced to issue debt in a foreign currency or commit the "original sin". The "original sin", regardless of exchange rate regime, exacerbates debt problems for these countries. Consequently, this paper investigates the relationship between US dollar...
Persistent link: https://www.econbiz.de/10013077545