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Author: Julia Faltermeier
Publisher: International Monetary Fund
ISBN: 147558931X
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
We study the optimal foreign exchange (FX) intervention policy in response to a positive terms of trade shock and associated Dutch disease episode in a small open economy model. We find that during a Dutch disease episode tradable production drops below the socially optimal level, resulting in lower welfare under learningby- doing (LBD) externalities. FX reserves accumulation improves welfare by preventing a large appreciation of the real exchange rate and by inducing an efficient reallocation between the tradable and non-tradable sectors. For an empirically plausible parametrization of LBD externalities, the model predicts that in response to a 10 percent increase in commodity prices FX reserves should increase by 1.5 percent of GDP. We also find that the welfare gains from optimally using FX reserves are twice as high as the gains from relying only on monetary policy. These results suggest that FX intervention is a beneficial policy to counteract the loss of competitiveness during a Dutch disease episode.
Author: Julia Faltermeier
Publisher: International Monetary Fund
ISBN: 147558931X
Category : Business & Economics
Languages : en
Pages : 36
Get Book Here
Book Description
We study the optimal foreign exchange (FX) intervention policy in response to a positive terms of trade shock and associated Dutch disease episode in a small open economy model. We find that during a Dutch disease episode tradable production drops below the socially optimal level, resulting in lower welfare under learningby- doing (LBD) externalities. FX reserves accumulation improves welfare by preventing a large appreciation of the real exchange rate and by inducing an efficient reallocation between the tradable and non-tradable sectors. For an empirically plausible parametrization of LBD externalities, the model predicts that in response to a 10 percent increase in commodity prices FX reserves should increase by 1.5 percent of GDP. We also find that the welfare gains from optimally using FX reserves are twice as high as the gains from relying only on monetary policy. These results suggest that FX intervention is a beneficial policy to counteract the loss of competitiveness during a Dutch disease episode.
Author: Julia Faltermeier
Publisher: International Monetary Fund
ISBN: 1475589239
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
We study the optimal foreign exchange (FX) intervention policy in response to a positive terms of trade shock and associated Dutch disease episode in a small open economy model. We find that during a Dutch disease episode tradable production drops below the socially optimal level, resulting in lower welfare under learningby- doing (LBD) externalities. FX reserves accumulation improves welfare by preventing a large appreciation of the real exchange rate and by inducing an efficient reallocation between the tradable and non-tradable sectors. For an empirically plausible parametrization of LBD externalities, the model predicts that in response to a 10 percent increase in commodity prices FX reserves should increase by 1.5 percent of GDP. We also find that the welfare gains from optimally using FX reserves are twice as high as the gains from relying only on monetary policy. These results suggest that FX intervention is a beneficial policy to counteract the loss of competitiveness during a Dutch disease episode.
Author: Warner Max Corden
Publisher:
ISBN: 9780868310794
Category : Business cycles
Languages : en
Pages : 37
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Book Description
Author: Mr.Ruy Lama
Publisher: International Monetary Fund
ISBN: 1455202169
Category : Business & Economics
Languages : en
Pages : 45
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Book Description
This paper evaluates how successful is a policy of exchange rate stabilization to counteract the negative effects of a Dutch Disease episode. We consider a small open economy model that incorporates nominal rigidities and a learning-by-doing externality in the tradable sector. The paper shows that leaning against an appreciated exchange rate can prevent an inefficient loss of tradable output but at the cost of generating a misallocation of resources in other sectors of the economy. The paper also finds that welfare is a decreasing function of exchange rate intervention. These results suggest that stabilizing the nominal exchange rate in response to a Dutch Disease episode is highly distortionary.
Author: Prince Emeka Ndimele
Publisher: Academic Press
ISBN: 0128096284
Category : Science
Languages : en
Pages : 487
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Book Description
The Political Ecology of Oil and Gas Activities in the Nigerian Aquatic Ecosystem reviews the current status of the ecosystems and economic implications of oil and gas development in Nigeria, a key oil-producing state. The ecological and economic impacts of oil and gas development, particularly in developing nations, are crucial topics for ecologists, natural resource professionals and pollution researchers to understand. This book takes an integrative approach to these problems through the lens of one of the key oil-producing nations, linking natural and human systems through the valuation of ecosystem services. - Provides background information on Nigerian aquatic environments, its local history of oil exploration and a review of the physical chemistry of crude oil - Reviews global and national perspectives on the oil and gas industry from a physical ecological, to a socio-political and economic ecological perspective - Demonstrates real-life situations of the interactions and impacts of Nigerian petroleum production on the environment and local populations through case studies
Author: Ronald MacDonald
Publisher: Routledge
ISBN: 1134838220
Category : Foreign exchange
Languages : en
Pages : 334
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Book Description
''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""
Author: Sebastian Edwards
Publisher: Johns Hopkins University Press
ISBN:
Category : Business & Economics
Languages : en
Pages : 110
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Book Description
This article analyzes the theory of equilibrium real exchange rates and defines misalignment as a deviation of the real exchange rate (RER) from its equilibrium level. The role of macroeconomic policies is then analyzed under three alternative nominal exchange rate regimes: predetermined nominal exchange rates; floating nominal rates; and dual or black market nominal exchange rates. This discussion points out how inconsistent macroeconomic policies often lead to real exchange rate misalignment. Corrective measures, including nominal devaluation and several alternative approaches, are then evaluated.
Author: Mr.Marcos d Chamon
Publisher: International Monetary Fund
ISBN: 1484375688
Category : Business & Economics
Languages : en
Pages : 320
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Book Description
Foreign exchange intervention is widely used as a policy tool, particularly in emerging markets, but many facets of this tool remain limited, especially in the context of flexible exchange rate regimes. The Latin American experience can be informative because some of its largest countries adopted floating exchange rate regimes and inflation targeting while continuing to intervene in foreign exchange markets. This edited volume reviews detailed accounts from several Latin American countries’ central banks, and it provides insight into how and with what aim many interventions were decided and implemented. This book documents the effectiveness of intervention and pays special attention to the role of foreign exchange intervention policy within inflation-targeting monetary frameworks. The main lesson from Latin America’s foreign exchange interventions, in the context of inflation targeting, is that the region has had a considerable degree of success. Transparency and a clear communication policy have been key. For economies that are not highly dollarized, rules-based intervention helped contain financial instability and build international reserves while preserving inflation targets. The Latin American experience can help other countries in the design and implementation of their policies.
Author: J. Megan Greene
Publisher: Routledge
ISBN: 1134125895
Category : Political Science
Languages : en
Pages : 351
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Book Description
Throughout the twentieth century Taiwan was viewed as a model - whether in terms of a model colony, a model China or a development model. This perception was based on the notion of Taiwan undergoing an economic miracle and political developments. Yet much of Taiwan’s history is unique and may not be readily replicable elsewhere. Written by an impressive line up of contributors from the US, UK, Taiwan, France and Hong Kong, this book analyzes Taiwan’s economic and political achievements, and asks whether it is possible to identify through the experience of a single nation – Taiwan – the makings of a replicable model. This book will appeal to students and scholars of Taiwan, political economy, and Asia-Pacific regional development issues.
Author: Luiz Carlos Bresser-Pereira
Publisher: Routledge
ISBN: 1136664610
Category : Business & Economics
Languages : en
Pages : 241
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Book Description
Developmental Macroeconomics: Access to Demand, the Exchange Rate and Growth offers a new approach to development economics and macroeconomics. It is a Keynesian-structuralist approach to economics applied to middle income countries that emphasizes the strategic role of demand in creating investment opportunities that are essential to economic development. It also explores crucial links between short-term full employment and financial stability with medium term growth. While this book emphasizes the central role played by the exchange rate it does not ignore other macroeconomic prices (the interest rate, the inflation rate and the profit rate). It develops a group of concepts and models and blends them together in the model of the tendency to the cyclical overvaluation of the exchange rate in developing countries. According to this model, the exchange rate tends to be chronically overvalued. In so far that this is true the exchange rate ceases to be just a short-term problem to be treated by macroeconomics and becomes central to development economics and should be crucially oriented to manage the exchange rate and keep it competitive at the industrial equilibrium level. The book closes with the presentation of new developmentalism – a national development strategy based on the system of models previously discussed that is both an alternative to old national-developmentalism and to liberal orthodoxy or the Washington consensus.
