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Author: Th. van de Klundert
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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Book Description
Author: Th van de Klundert
Publisher:
ISBN:
Category : Capital movements
Languages : en
Pages : 56
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Author: Th. van de Klundert
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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Book Description
Author: Pierre-Richard Agenor
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
This paper examines the long-run effects of macroeconomic policy shocks on the behavior of output, inflation, real wages and the real exchange rate in a small open economy. The analysis is based on a two-sector, three-good optimizing model with imperfect capital mobility, nominal wage contracts with backward- or forward-looking price expectations, and endogenous mark-up pricing in the nontraded goods sector. The effects of a cut in government spending on nontraded goods are shown to be independent of the expectational mechanism embedded in wage contracts. A reduction in the nominal devaluation rate lowers steady-state output in the tradable sector under backward-looking contracts, but exerts an expansionary effect under forward-looking contracts.
Author: Pierre-Richard Agénor
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 40
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Book Description
This paper examines the long-run effects of macroeconomic policy shocks on the behavior of output, inflation, real wages and the real exchange rate in a small open economy. The analysis is based on a two-sector, three-good optimizing model with imperfect capital mobility, nominal wage contracts with backward- or forward-looking price expectations, and endogenous mark-up pricing in the nontraded goods sector. The effects of a cut in government spending on nontraded goods are shown to be independent of the expectational mechanism embedded in wage contracts. A reduction in the nominal devaluation rate lowers steady-state output in the tradable sector under backward-looking contracts, but exerts an expansionary effect under forward-looking contracts.
Author: Camila Casas
Publisher: International Monetary Fund
ISBN: 1484330609
Category : Business & Economics
Languages : en
Pages : 62
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Book Description
Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) the terms-of-trade is stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports, driven by the dollar exchange rate while exports respond weakly, if at all; (e) strengthening of the dominant currency relative to non-dominant ones can negatively impact global trade; (f) optimal monetary policy targets deviations from the law of one price arising from dominant currency fluctuations, in addition to the inflation and output gap. Using data from Colombia we document strong support for the dominant currency paradigm.
Author: Stephen J. Turnovsky
Publisher: MIT Press
ISBN: 9780262201230
Category : Business & Economics
Languages : en
Pages : 698
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Book Description
Just as macroeconomic models describe the overall economy within a changing, or dynamic, framework, the models themselves change over time. In this text Stephen J. Turnovsky reviews in depth several early models as well as a representation of more recent models. They include traditional (backward-looking) models, linear rational expectations (future-looking) models, intertemporal optimization models, endogenous growth models, and continuous time stochastic models. The author uses examples from both closed and open economies. Whereas others commonly introduce models in a closed context, tacking on a brief discussion of the model in an open economy, Turnovsky integrates the two perspectives throughout to reflect the increasingly international outlook of the field. This new edition has been extensively revised. It contains a new chapter on optimal monetary and fiscal policy, and the coverage of growth theory has been expanded substantially. The range of growth models considered has been extended, with particular attention devoted to transitional dynamics and nonscale growth. The book includes cutting-edge research and unpublished data, including much of the author's own work.
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: Franz Gehrels
Publisher: Springer Science & Business Media
ISBN: 3642841988
Category : Business & Economics
Languages : en
Pages : 308
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Book Description
Helmut Schneider 1. The Formulation of the Research Programme 1. In the late sixties the acceleration of US inflation revived the discussion of the fifties about the superiority of flexible exchange rates: The US balance of payments deteriorated since 1965, the dollar shortage after World War II changed to a dollar surplus. The import of US inflation by their main trading partners intensified political pressures so that at the beginning of the seventies most leading countries decided, contrary to the rules of the Bretton Woods agreement, to stop their intervention in the market for foreign exchange and to let the exchange rates be determined by market forces. It is worthwhile recalling that at that time one had only very limited experience with the regime of flexible exchange rates: The most important case, the floating of Canadian against the US dollar, could not be generalized to a world where nearly all important countries adhered to the regime of flexible exchange rates. ! - But one really had rich experience with destabilizing capital flows (or "hot money") that forced monetary authorities to adjust exchange rates in a system of managed flexibility to the expecta tions of "speculators".
Author: Aart de Zeeuw
Publisher: Academic Press
ISBN:
Category : Business & Economics
Languages : en
Pages : 276
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Book Description
This book contains a series of lectures recently given to researchers and students in quantitative economics by an international group of distinguished scholars. The topics covered are at the forefront of recent developments of research in economics and econometrics. The book is divided into three sections: Microeconomics, Macroeconomics and Econometrics. The section on Microeconomics contains chapters on the economics of destitution and an overview of general equilibrium theory with incomplete markets. The section on Macroeconomics contains chapters on the new endogenous growth theory and the microeconomic underpinning of dynamic international macroeconomic models. The section on Econometrics contains chapters on the rapidly expanding literature for GARCH models of volatility, empirical analysis of time series and asymptotic estimation theory for nonlinear econometric models. This will be essential reading for graduate students and researchers in economics, econometrics and finance.
Author: Mr.Marco Airaudo
Publisher: International Monetary Fund
ISBN: 1475523165
Category : Business & Economics
Languages : en
Pages : 65
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Book Description
We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic and foreign financial assets. Our central finding is that management of the exchange rate greatly enhances the efficacy of inflation targeting. In a flexible exchange rate system, inflation targeting incurs a high risk of indeterminacy where macroeconomic fluctuations can be driven by self-fulfilling expectations. Moreover, small inflation shocks may escalate into much larger increases in inflation ex post. Both problems disappear when the central bank leans heavily against the wind in a managed float.
