A Statistical Study of the Value of the Mexican Peso Relative to the Dollar and Its Volatility PDF Download
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Author: Alejandro M. Werner
Publisher:
ISBN:
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Languages : en
Pages : 0
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Book Description
This paper studies the behavior of the Mexican peso during the floating exchange rate period of 1995-1996. We study the statistical properties of the exchange rate's daily fluctuations, and we compared them with those observed for other currencies. We conclude that except for the periods of extreme volatility experienced in 1995, which were associated with an increase in uncertainty towards the whole macroeconomic strategy, the volatility of the Mexican peso was similar to that experienced by other currencies under a floating exchange rate regime. We also study the effect of domestic and foreign interest rates on the exchange rate and its volatility. Finally, we look at the impact of exchange rate changes and foreign interest rates on domestic interest rates.
Author: Alejandro M. Werner
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper studies the behavior of the Mexican peso during the floating exchange rate period of 1995-1996. We study the statistical properties of the exchange rate's daily fluctuations, and we compared them with those observed for other currencies. We conclude that except for the periods of extreme volatility experienced in 1995, which were associated with an increase in uncertainty towards the whole macroeconomic strategy, the volatility of the Mexican peso was similar to that experienced by other currencies under a floating exchange rate regime. We also study the effect of domestic and foreign interest rates on the exchange rate and its volatility. Finally, we look at the impact of exchange rate changes and foreign interest rates on domestic interest rates.
Author: Mr.Paul R. Masson
Publisher: International Monetary Fund
ISBN: 1451929099
Category : Business & Economics
Languages : en
Pages : 36
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Book Description
This paper examines credibility and reputational factors in explaining the December 1994 crisis of the Mexican peso. After reviewing events leading to the crisis, a model emphasizing the inflation-competitiveness trade-off is presented to explain the formation of devaluation expectations. Estimation results indicate that investors appear to have seriously underestimated the risk of devaluation, despite early warning signals. The collapse of confidence that followed the December 20 devaluation may have been the result of a shift in the perceived commitment of the authorities to exchange rate stability.
Author:
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Category :
Languages : en
Pages :
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Category : Latin America
Languages : en
Pages : 338
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Book Description
Author: Romain Lafarguette
Publisher: International Monetary Fund
ISBN: 1513569406
Category : Business & Economics
Languages : en
Pages : 33
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Book Description
This paper presents a rule for foreign exchange interventions (FXI), designed to preserve financial stability in floating exchange rate arrangements. The FXI rule addresses a market failure: the absence of hedging solution for tail exchange rate risk in the market (i.e. high volatility). Market impairment or overshoot of exchange rate between two equilibria could generate high volatility and threaten financial stability due to unhedged exposure to exchange rate risk in the economy. The rule uses the concept of Value at Risk (VaR) to define FXI triggers. While it provides to the market a hedge against tail risk, the rule allows the exchange rate to smoothly adjust to new equilibria. In addition, the rule is budget neutral over the medium term, encourages a prudent risk management in the market, and is more resilient to speculative attacks than other rules, such as fixed-volatility rules. The empirical methodology is backtested on Banco Mexico’s FXIs data between 2008 and 2016.
Author: Paul Kellogg
Publisher: University of Toronto Press
ISBN: 0802096549
Category : Business & Economics
Languages : en
Pages : 300
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Book Description
Escape from the Staple Trap is a powerful critique of the dominant trend in Canadian political economy since the 1970s.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1498330282
Category : Business & Economics
Languages : en
Pages : 132
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Book Description
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Author: Paul Krugman
Publisher: University of Chicago Press
ISBN: 0226454649
Category : Business & Economics
Languages : en
Pages : 367
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Book Description
There is no universally accepted definition of a currency crisis, but most would agree that they all involve one key element: investors fleeing a currency en masse out of fear that it might be devalued, in turn fueling the very devaluation they anticipated. Although such crises—the Latin American debt crisis of the 1980s, the speculations on European currencies in the early 1990s, and the ensuing Mexican, South American, and Asian crises—have played a central role in world affairs and continue to occur at an alarming rate, many questions about their causes and effects remain to be answered. In this wide-ranging volume, some of the best minds in economics focus on the historical and theoretical aspects of currency crises to investigate three fundamental issues: What drives currency crises? How should government behavior be modeled? And what are the actual consequences to the real economy? Reflecting the latest thinking on the subject, this offering from the NBER will serve as a useful basis for further debate on the theory and practice of speculative attacks, as well as a valuable resource as new crises loom.
Author: National Intelligence Council
Publisher: Cosimo Reports
ISBN: 9781646794973
Category :
Languages : en
Pages : 158
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Book Description
"The ongoing COVID-19 pandemic marks the most significant, singular global disruption since World War II, with health, economic, political, and security implications that will ripple for years to come." -Global Trends 2040 (2021) Global Trends 2040-A More Contested World (2021), released by the US National Intelligence Council, is the latest report in its series of reports starting in 1997 about megatrends and the world's future. This report, strongly influenced by the COVID-19 pandemic, paints a bleak picture of the future and describes a contested, fragmented and turbulent world. It specifically discusses the four main trends that will shape tomorrow's world: - Demographics-by 2040, 1.4 billion people will be added mostly in Africa and South Asia. - Economics-increased government debt and concentrated economic power will escalate problems for the poor and middleclass. - Climate-a hotter world will increase water, food, and health insecurity. - Technology-the emergence of new technologies could both solve and cause problems for human life. Students of trends, policymakers, entrepreneurs, academics, journalists and anyone eager for a glimpse into the next decades, will find this report, with colored graphs, essential reading.
Author: Mr.Yi Wu
Publisher: International Monetary Fund
ISBN: 1484393619
Category : Business & Economics
Languages : en
Pages : 22
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Book Description
This paper examines the factors affecting the weekly peso/dollar exchange rate movements between 1999 and 2013 using an error correction model. The model fits the historical data well. While copper price is the most important determinant of the peso exchange rate over the long run, other factors including interest rate differential, global financial distress, local pension funds’ derivative position, as well as the Federal Reserve’s quantitative easing also affect the peso in the short run. The Central Bank of Chile’s foreign exchange interventions in 2008 and 2011 had a small impact on the peso.
