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Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451979975
Category : Business & Economics
Languages : en
Pages : 34
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Book Description
This paper analyzes the dynamics of the real exchange rate and the price of equity for a small open economy using an optimizing model in which the process of capital accumulation entails adjustment costs. The analysis demonstrates that along an adjustment path toward long-run equilibrium, appreciation of the real exchange rate will accompany a decline in the market price of equity, whereas depreciation of the real exchange rate will accompany a rise in the price of equity. This relationship results from the requirement that non-traded inputs are used in the investment process. In the short-run, though, the effects on these variables depend critically on whether disturbances originate in the non-traded sector and on whether disturbances are perceived as temporary or permanent. The disturbances considered include changes in fiscal policies as well as changes in the world interest rate.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451979975
Category : Business & Economics
Languages : en
Pages : 34
Get Book Here
Book Description
This paper analyzes the dynamics of the real exchange rate and the price of equity for a small open economy using an optimizing model in which the process of capital accumulation entails adjustment costs. The analysis demonstrates that along an adjustment path toward long-run equilibrium, appreciation of the real exchange rate will accompany a decline in the market price of equity, whereas depreciation of the real exchange rate will accompany a rise in the price of equity. This relationship results from the requirement that non-traded inputs are used in the investment process. In the short-run, though, the effects on these variables depend critically on whether disturbances originate in the non-traded sector and on whether disturbances are perceived as temporary or permanent. The disturbances considered include changes in fiscal policies as well as changes in the world interest rate.
Author: Robert G. Murphy
Publisher:
ISBN:
Category : Capital stock
Languages : en
Pages : 42
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Book Description
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: Luis Serven
Publisher: World Bank Publications
ISBN:
Category : Bienes de capital
Languages : en
Pages : 33
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Book Description
Author: International Monetary Fund. Research Dept.
Publisher: International Monetary Fund
ISBN: 1451956827
Category : Business & Economics
Languages : en
Pages : 288
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Book Description
The determinants of current account imbalances under floating exchange rates are analyzed. The analysis provides a framework within which the sources of. and the remedies for, the current account imbalances between the United States, Japan, and the Federal Republic of Germany can be discussed. The effects of various government policies are emphasized, in particular the differences between expenditure-changing and expenditure-switching policies. Short-run and long-run considerations are investigated, as well as the role played by expectations and price-level dynamics.
Author: John H. Cochrane
Publisher: Now Publishers Inc
ISBN: 1933019158
Category : Business & Economics
Languages : en
Pages : 117
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Book Description
Financial Markets and the Real Economy reviews the current academic literature on the macroeconomics of finance.
Author: Stephen J. Turnovsky
Publisher: MIT Press
ISBN: 9780262201117
Category : Business & Economics
Languages : en
Pages : 514
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Book Description
International Macroeconomic Dynamics provides extensive applications of important macroeconomic dynamic models to the international economy. For a long time, the study of macroeconomics has focused almost exclusively on a closed economy and downplayed the role of international transactions. Today, however, researchers recognize that one cannot fully understand domestic macroeconomic relationships without considering the global economy within which each country operates. Increasingly, economists are treating international transactions as an integral part of the macroeconomic system, and international macroeconomics has become an area of intensive research activity. International Macroeconomic Dynamics provides extensive applications of important macroeconomic dynamic models to the international economy. It adopts the main contemporary macroeconomic framework, the representative agent model, and develops a series of models of increasing complexity. The author considers both small and large economies and analyzes them in both deterministic and stochastic contexts. The emphasis is very much on the development of the analytical models; a novel feature is the extensive use of continuous-time stochastic methods. While the author applies the models to a range of important policy issues, particularly issues of fiscal policy, the reader is invited to view the analyses as blueprints for other applications.
Author: Fritz Machlup
Publisher: Ludwig von Mises Institute
ISBN: 1610163354
Category : Capital
Languages : en
Pages : 432
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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: 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.
