External Shocks, the Real Exchange Rate, and Tax Policy PDF Download
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Author: Mr.Stephen Tokarick
Publisher: International Monetary Fund
ISBN: 145185109X
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
This paper uses a computable general equilibrium model of the economy of Trinidad and Tobago to assess the effects of trade liberalization and terms-of-trade shocks on the real exchange rate and the overall fiscal position of the government. The model is also used to evaluate the implications of alternative tax policies designed to offset the increase in the budget deficit of the central government that results from both types of external sector shocks.
Author: Mr.Stephen Tokarick
Publisher: International Monetary Fund
ISBN: 145185109X
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
This paper uses a computable general equilibrium model of the economy of Trinidad and Tobago to assess the effects of trade liberalization and terms-of-trade shocks on the real exchange rate and the overall fiscal position of the government. The model is also used to evaluate the implications of alternative tax policies designed to offset the increase in the budget deficit of the central government that results from both types of external sector shocks.
Author: Stephen P. Tokarick
Publisher:
ISBN: 9780004341521
Category :
Languages : en
Pages : 0
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Book Description
Author: Mr. Nicolas E Magud
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 51
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Book Description
We use panel quantile regressions to study extreme (rather than average) movements in the distribution of the real effective exchange rate (REER) of small open economies. We document that global uncertainty (VIX) and global financial conditions (U.S. monetary policy) shocks have a strong impact on the distribution of the REER changes, with larger impacts in the tails of the distribution, and especially in economies with shallower FX markets, lower central bank credibility, and higher credit risk (i.e., weaker macro fundamentals). Foreign exchange intervention (FXI) partially offsets the impact of these shocks, especially in the left tail (large depreciations) and particularly in economies with weaker fundamentals but, more importantly, when FXI is used sporadically. Thus, our results highlight the importance of deepening FX markets, improving central bank credibility, and strengthening macro fundamentals against the potential dynamic trade-offs of overreliance on a policy that would exacerbate the previously mentioned frictions. While our results point to low effectiveness of capital flow management in preventing large REER movements, they seem to enable more impactful foreign exchange intervention in the immediate aftermath of shocks.
Author: Peter Montiel
Publisher:
ISBN:
Category : Developing countries
Languages : en
Pages : 54
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Book Description
Author: Mr.Guillermo Calvo
Publisher: International Monetary Fund
ISBN: 1451921217
Category : Business & Economics
Languages : en
Pages : 50
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Book Description
This paper presents a theoretical and empirical analysis of policies aimed at setting a more depreciated level of the real exchange rate. An intertemporal optimizing model suggests that, in the absence of changes in fiscal policy, a more depreciated level of the real exchange can only be attained temporarily. This can be achieved by means of higher inflation and/or higher real interest rates, depending on the degree of capital mobility. Evidence for Brazil, Chile, and Colombia supports the model’s prediction that undervalued real exchange rates are associated with higher inflation.
Author: Klaus Schmidt-Hebbel
Publisher: World Bank Publications
ISBN:
Category :
Languages : en
Pages : 64
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Book Description
Author: Mr.Mohsin S. Khan
Publisher: International Monetary Fund
ISBN: 9781557752093
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
This paper addresses analytical aspects of exchange rate policy and emphasizes the relationship among exchange rate flexibility, financial discipline, and international competitiveness.
Author: Mr.José Saúl Lizondo
Publisher: International Monetary Fund
ISBN: 1451845626
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
This paper presents a model of an economy that uses nominal exchange rate policy to keep the real exchange rate constant at a certain target level, under imperfect asset substitutability. The paper discusses the determinants of inflation under such a policy, and examines the consequences of exogenous and policy-induced shocks on inflation, the external accounts, and the fiscal accounts. The shocks considered include changes in the real exchange rate target, changes in fiscal policy, changes in foreign interest rates, and open market sales of public sector domestic bonds.
Author: Peter Montiel
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 24
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Book Description
Author: Antonio C. David
Publisher: World Bank Publications
ISBN:
Category : Bank Policy
Languages : en
Pages : 26
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Book Description
The author attempts to analyze whether price-based controls on capital inflows are successful in insulating economies against external shocks. He presents results from vector auto regressive (VAR) models that indicate that Chile and Colombia, countries that adopted controls on capital inflows, seem to have been relatively well insulated against external disturbances. Subsequently, he uses the auto regressive distributed lag (ARDL) approach to co-integration to isolate the effects of the capital controls on the pass-through of external disturbances to domestic interest rates in those economies. The author concludes that there is evidence that the capital controls allowed for greater policy autonomy.
