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The Valuation Channel of External Adjustment

Ghironi, Fabio; Lee, Jaewoo; Rebucci, Alessandro - Department of Economics, Boston College - 2009

International financial integration has greatly increased the scope for changes in a country's net foreign asset position through the "valuation channel" of external adjustment, namely capital gains and losses on the country's external assets and liabilities. We examine this valuation channel...

Persistent link: https://www.econbiz.de/10008461352

Productivity-Enhancing Reforms, Private Capital Inflows, and Real Interest Rates in Africa

Atolia, Manoj - Department of Economics, Florida State University - 2003

The rise in economic growth in some countries of Africa over past two decades, powered mainly by productivity boom, has been associated with large private capital in.ows despite poor integration of the African countries with the world capital markets. While these countries lack access to world...

Persistent link: https://www.econbiz.de/10005627215

The link between interest rates and exchange rates: do contractionary depreciations make a difference?

Sánchez, Marcelo - 2005

The link between exchange rates and interest rates features prominently in the theoretical and empirical literature on small open economies. This paper revisits this relationship using a simple model that incorporates the role of exchange rate pass-through into domestic prices and distinguishes...

Persistent link: https://www.econbiz.de/10011604594

How does information affect the comovement between interest rates and exchange rates?

Sánchez, Marcelo - 2006

This paper compares the link between exchange rates and interest rates under full information and two alternative asymmetric information approaches. It also distinguishes between cases of expansionary and contractionary depreciations. Full information results are not robust to the presence of...

Persistent link: https://www.econbiz.de/10011604654

Commodity Currencies and Monetary Policy

Devereux, Michael B.; Smith, Gregor W. - 2018

Countries that specialize in commodity exports often exhibit a correlation between the relevant commodity price and the value of their currency. We explore a natural but little-studied explanation for this correlation. An increase in the commodity price leads to increases in the future values of...

Persistent link: https://www.econbiz.de/10011939459

Conditional exchange rate pass-through: Evidence from Sweden

Corbo, Vesna; Di Casola, Paola - 2018

The pass-through from exchange rate changes to inflation differs depending on the underlying shock. This paper quantifies the conditional exchange rate pass-through (CERPT) to prices, i.e. the change in prices relative to that in the exchange rate following a certain exogenous shock, with a...

Persistent link: https://www.econbiz.de/10011943322

How Does Monetary Policy Respond to Exchange Rate Movements? New International Evidence

Bjørnland, Hilde C.; Halvorsen, Jørn Inge - 2008

This paper analyzes how monetary policy responds to exchange rate movements in open economies, paying particular attention to the two-way interaction between monetary policy and exchange rate movements. We address this issue using a structural VAR model that is identified using a combination of...

Persistent link: https://www.econbiz.de/10012143695

Monetary Policy and Exchange Rate Overshooting: Dornbusch Was Right After All

Bjørnland, Hilde C. - 2009

Dornbusch's exchange rate overshooting hypothesis is a central building block in international macroeconomics. Yet …, empirical studies of monetary policy have typically found exchange rate effects that are inconsistent with overshooting. This … the Dornbusch overshooting hypothesis and with few exceptions consistent with UIP. …

Persistent link: https://www.econbiz.de/10012143714

Surfing the waves of globalization : Asia and financial globalization in the context of the trilemma

Aizenman, Joshua; Chinn, Menzie David; Itō, Hiro - 2011

Using the "trilemma indexes" developed by Aizenman et al. (2010) that measure the extent of achievement in each of the three policy goals in the trilemma - monetary independence, exchange rate stability, and financial openness - we examine how policy configurations affect macroeconomic...

Persistent link: https://www.econbiz.de/10009158763

Dynamic demand adjustment and exchange rate volatility

Corbo, Vesna - 2014

A common finding in the international-economics literature is that the elasticity of substitution between domestically produced and imported goods is smaller in the short than in the long run. Despite this, most of today's commonly used macroeconomic models assume this elasticity to be constant....

Persistent link: https://www.econbiz.de/10010437790