In this paper, we analyze the traditional-revisionist debate on whether high interest rate can defend the downfall in currency values by allowing for asymmetric responses of exchange rate to positive and negative changes in the interest rate using Thailand data. Applying an EGARCH specification...

The phenomenon of incomplete exchange rate pass-through to prices has become one of the key research areas within so-called New Open Economy Macroeconomics. This theme is widely analyzed mainly in the American literature at macroeconomics as well as on microeconomics levels. The main aim of the...

The frequency and sphere of influence of the economic shocks began to extend with the acceleration of the global economic integration. The exchange rate is regarded as an important policy instrument in terms of the destroying of the harmful effects of these shocks on economy. The aim of this...

A currency board combines three elements: a fixed exchange rate between a country’s currency and an “anchor currency,” automatic convertibility, and a long-term commitment to the system, often made explicit in the central bank law. The main reason for countries to consider a currency board...

This paper analyses the descriptive power of the different extensions of the Taylor rule. It also investigates whether monetary policy in South Africa can indeed be described by a linear Taylor rule or, instead, by a nonlinear rule. In particular, we extend the linear Taylor rule to a...

This paper investigates macroeconomic determinants of the realisation of credit risk in the banking book (measured by the ratio of loan loss provisions to the value of total gross loans) using a panel data set of 33 Serbian banks spanning from 2008Q3 to 2012Q2. Three different panel methods were...

Economic theory suggests that FDI reinforced economic growth leading to economic development. The present paper analyses four macroeconomic factors that are affecting FDI inflows in Jordan. However, it examines the long-run and short-run causality relationships among inflation rate (INF), gross...

This paper investigates the interdependence of stock price changes and exchange rate changes. More specifically, it examines the impact of past currency appreciations and depreciations on the price as well as the volatility of stocks. Similarly, it investigates the influence of past stock price...

The exchange-rate regime is often seen as constrained by the monetary policy trilemma, which imposes a stark tradeoff among exchange stability, monetary independence, and capital market openness. Yet the trilemma has not gone without challenge. Some (e.g., Calvo and Reinhart 2001, 2002) argue...

This paper investigates the determinants and dynamics of deposit euroization (DE) in 12 European post-transition economies based on threshold models. The results suggest that exchange rates and interest rate differentials are important for explaining DE. The results for the two countries with...