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Noise Trading and the Effects of Monetary Policy Shocks on Nominal and Real Exchange Rates

Pierdzioch, Christian - 2003

A number of empirical studies have reported the result that exchange rates show a delayed overshooting in response to … monetary policy shocks. This result is puzzling. Economic theory suggests that the overshooting should occur immediately after … whether the assumption of noise trading in the foreign exchange market helps to resolve the delayed overshooting puzzle. The …

Persistent link: https://www.econbiz.de/10010260546

Exchange-rate overshooting : an analysis for intermediate macro

Natividad-Carlos, Fidelina Borja - 2014

While exchange rate dynamics is an important topic in open economy macroeconomics, the standard tool commonly used to introduce exchange rate dynamics - the Dornbusch (1976) seminal paper along with phase diagram - is not well-suited for undergraduate students as most of them do not have yet a...

Persistent link: https://www.econbiz.de/10010422230

Germany versus the United States : monetary Dominance in the Eurozone

Quah, Chee Heong - In: Economies : open access journal 4 (2016) 2, pp. 1-16

This study inspects if there is greater convergence with Germany amongst the Eurozone founding members and if their relations with the hegemonic economy have been more symmetrical after "euroization". The dimensions explored are those inspired by the optimum currency areas (OCA) framework. To...

Persistent link: https://www.econbiz.de/10011499412

Shifts in monetary policy and exchange rate dynamics : is Dornbusch's overshooting hypothesis intact, after all?

Rüth, Sebastian - 2019

- empirical support for his hypothesis is at best mixed. I argue that the failure to discover overshooting may result from …

Persistent link: https://www.econbiz.de/10012124364

Exchange rate overshooting : unraveling the puzzles

Braig, Miriam; Rüth, Sebastian; Van der Veken, Wouter - 2024

vector autoregression, and assess whether best-practice structural identifications detect textbook "overshooting" after a … monetary policy hike-i.e., an instant real appreciation that monotonically reverts. Our results include "delayed overshooting …," "exchange rate puzzles," "forward discount puzzles," and model-consistent overshooting. Identifications that regularly indicate …

Persistent link: https://www.econbiz.de/10015069881

Exports and the exchange rate : a general equilibrium perspective

Alexander, Patrick; Reza, Abeer - 2022 - Last updated: April 4, 2022

Understanding and predicting the evolution of exports after a change in the nominal exchange rate is of central importance in international economics. Most of the literature focuses on estimating this relationship by reduced form, with the aim of uncovering a single structural parameter, but...

Persistent link: https://www.econbiz.de/10013172465

Unconventional monetary policy under appreciation pressure : the role of financial frictions

Aregger, Nicole; Leutert, Jessica - 2017 - This draft: September 2017

We build a two-country model with imperfect financial intermediation. Banks face limits to arbitrage which lead to positive excess returns in the investment markets and a risk premium in the international credit market. Gross capital flows affect the exchange rate since banks are balance sheet...

Persistent link: https://www.econbiz.de/10011742713

Long-Term External Position and Equilibrium Real Exchange Rate in Colombia

Ojeda, Jair; Torres, Jhon - In: Lecturas de Economía (2012) 77, pp. 9-52

This paper calculates an equilibrium level for Net Foreign Assets (NFA) in Colombia, and discusses its implications for the real exchange rate (RER). In order to obtain the equilibrium level of NFA, we estimate a cointegrating vector with fixed-effects panel data adjusted by using Dynamic Least...

Persistent link: https://www.econbiz.de/10010638747

Productivity Shocks and Delayed Exchange-Rate Overshooting

Pierdzioch, Christian - 2004

can give rise to a delayed overshooting of the exchange rate. …

Persistent link: https://www.econbiz.de/10010260479

Determining underlying macroeconomic fundamentals during emerging market crises: Are conditions as bad as they seem?

Aguiar, Mark; Broner, Fernando - Department of Economics and Business, Universitat … - 2001

Emerging market crises are characterized by large swings in both macroeconomic fundamentals and asset prices. The economic significance of observed movements in macroeconomic variables is obscured by the brief and extreme nature of crises. In this paper we propose to study the macroeconomic...

Persistent link: https://www.econbiz.de/10005707990

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