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Author: Irving B. Kravis
Publisher:
ISBN:
Category : Foreign exchange
Languages : de
Pages :
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Book Description
This paper examines changes in national price levels and prices of tradables and nontradables and relates them to changes in variables found earlier to be associated with price level differences among countries. Across countries, national price levels increase systematically with the level of a country's per capita income, and the ratios of tradables to nontradables prices decrease. Over time, increases in per capita income are generally associated with increases in price levels in the industrial countries, although the opposite relationship tended to prevail among developing countries. Increases in income are associated with declines in the ratio of tradables to nontradables price levels more consistently than with the increases in general price levels. Increases in the exchange value of a currency are also associated with declines in the price levels for tradablesrelative to nontradables. Countries with price levels that were high or low relative to those predicted by the structural equations tended to move toward those predicted levels.
Author: Irving B. Kravis
Publisher:
ISBN:
Category : Foreign exchange
Languages : de
Pages :
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Book Description
This paper examines changes in national price levels and prices of tradables and nontradables and relates them to changes in variables found earlier to be associated with price level differences among countries. Across countries, national price levels increase systematically with the level of a country's per capita income, and the ratios of tradables to nontradables prices decrease. Over time, increases in per capita income are generally associated with increases in price levels in the industrial countries, although the opposite relationship tended to prevail among developing countries. Increases in income are associated with declines in the ratio of tradables to nontradables price levels more consistently than with the increases in general price levels. Increases in the exchange value of a currency are also associated with declines in the price levels for tradablesrelative to nontradables. Countries with price levels that were high or low relative to those predicted by the structural equations tended to move toward those predicted levels.
Author: Irving B. Kravis
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 48
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Book Description
"The purpose of this paper is to call attention to the need for a theory of comparative national price levels and to explore some of the elements that seem to belong to such a theory. Most theoretical discussions have maintained that national price levels tend towards equality and focus on presumably temporary divergences from equality. Yet strong evidence has been accumulating that there are large and long-standing differences inprice levels, the highest of which are more than twice those of countries with the lowest prices. Long-run price level differences are most clearly related to levels of real per capita output, with richer countries having higher price levels.These differences have been explained as resulting from greater advantages in productivity for the wealthier countries in goods production, mostly tradable, than in services production, mostly nontradable. The differences in relative productivity may be in total factor productivity or only in labor productivity, reflecting the greater capital intensity of goods production and possibly a higher elasticity of substitution between capital and labor in goods production.We find in the empirical analysis that a large part of the differences in price levels can be explained by structural factors such as real GDP per capita, the degree of openness of the economy, and the share of nontradable goods in output. The only non-structural factor emerging from a preliminary analysis of several of these was the rate of growth of the quantity of money"--NBER website
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Category :
Languages : en
Pages :
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Author: Irving B. Kravis
Publisher:
ISBN:
Category :
Languages : es
Pages : 23
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Author: Mr.Gian Milesi-Ferretti
Publisher: International Monetary Fund
ISBN: 1451922515
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
This paper attempts to provide a perspective on real exchange rate developments following the inception of the EMS. The focus is on structural determinants of real exchange rates, notably the behavior of tradables and nontradable prices and productivity. It is found that changes in the relative price of tradable goods in terms of nontradables account for a sizable fraction of real exchange rate dynamics during the EMS period. Sectoral productivity growth differential help explain the behavior of the relative price of tradable goods, especially in the long run. There is also some evidence that the EMS has extended on relative price behavior.
Author: Takatoshi Ito
Publisher: University of Chicago Press
ISBN: 0226387089
Category : Business & Economics
Languages : en
Pages : 441
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Book Description
The imbalanced, yet mutually beneficial, trading relationship between the United States and Asia has long been one of international finance’s most perplexing mysteries. Although the United States continues to post a substantial trade deficit—and China reaps the benefits of a surplus—the dollar has yet to sink in the face of ever-increasing account disparities. International Financial Issues in the Pacific Rim explains why the United States enjoys a seemingly symbiotic relationship with its trading partners despite stark inequities in the trade balance, especially with Asia. This timely and well-informed study also debunks the assumed link between economic openness and low inflation in the region, identifies the serious gap between academic and private-sector researchers’ understanding of exchange rate volatility, and analyzes the liberalization of Asian capital accounts. International Financial Issues in the Pacific Rim will have broad implications for global trade and economic policy issues in Asia and beyond.
Author: Robert C. Feenstra
Publisher: University of Chicago Press
ISBN: 0226239721
Category : Business & Economics
Languages : en
Pages : 603
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Book Description
In less than three decades, China has grown from playing a negligible role in international trade to being one of the world's largest exporters, a substantial importer of raw materials, intermediate outputs, and other goods, and both a recipient and source of foreign investment. Not surprisingly, China's economic dynamism has generated considerable attention and concern in the United States and beyond. While some analysts have warned of the potential pitfalls of China's rise—the loss of jobs, for example—others have highlighted the benefits of new market and investment opportunities for US firms. Bringing together an expert group of contributors, China's Growing Role in World Trade undertakes an empirical investigation of the effects of China's new status. The essays collected here provide detailed analyses of the microstructure of trade, the macroeconomic implications, sector-level issues, and foreign direct investment. This volume's careful examination of micro data in light of established economic theories clarifies a number of misconceptions, disproves some conventional wisdom, and documents data patterns that enhance our understanding of China's trade and what it may mean to the rest of the world.
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: Pan A. Yotopoulos
Publisher: Cambridge University Press
ISBN: 9780521482165
Category : Business & Economics
Languages : en
Pages : 356
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Book Description
This book extends recent theories of incomplete markets to investigate empirically the appropriate balance between the market and the state in the trade relations between developed and developing countries. The conclusion is that in an ideal world government intervention in foreign exchange and trade is necessary in developing countries in the early stages and inevitably decreases as development occurs. Rationing of foreign exchange prevents a 'soft currency distortion' that commonly afflicts developing countries and can turn comparative advantage trade into competitive devaluation trade, with severe losses of income and welfare. Yotopoulos finds that the level of underdevelopment narrowly circumscribes and conditions the extent to which free-market, free-trade, laissez-faire can be beneficial, contrary to the mainstream policy paradigm as currently applied. The analysis and tests draw on empirical research from seventy countries and four extended country studies to confirm the usefulness and validity of the theoretical framework.
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.
