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Author: Majed El-Helou
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The issue to be examined is whether flexible exchange rates result in less variability in GDP and unemployment rates. Basically, with a fixed exchange rate governments cannot allow the exchange rate to fluctuate in response to external shocks to the economy, nor are they as able to use monetary and/or fiscal policy to respond to external shocks. Since an external shock cannot be accommodated by a nominal change in the exchange rate or through monetary policy, such shocks must be accommodated by changes in real economic activity, i.e., changes in GDP and unemployment. With a flexible exchange rate, an external shock can be accommodated by a change in the exchange rate, or through monetary and/or fiscal policy and should thus have less impact on unemployment and GDP. This hypothesis is theoretically studied and explained more widely in the thesis and is tested with the data available.
Author: Majed El-Helou
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The issue to be examined is whether flexible exchange rates result in less variability in GDP and unemployment rates. Basically, with a fixed exchange rate governments cannot allow the exchange rate to fluctuate in response to external shocks to the economy, nor are they as able to use monetary and/or fiscal policy to respond to external shocks. Since an external shock cannot be accommodated by a nominal change in the exchange rate or through monetary policy, such shocks must be accommodated by changes in real economic activity, i.e., changes in GDP and unemployment. With a flexible exchange rate, an external shock can be accommodated by a change in the exchange rate, or through monetary and/or fiscal policy and should thus have less impact on unemployment and GDP. This hypothesis is theoretically studied and explained more widely in the thesis and is tested with the data available.
Author: Martin Weale
Publisher: Routledge
ISBN: 1317379438
Category : Business & Economics
Languages : en
Pages : 403
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Book Description
This analysis of macroeconomic policy, originally published in 1989, argues that key government objectives, such as reduced inflation, decreased unemployment and an adequate level of national saving can be achieved only by employing both monetary and fiscal policies, in conjunction with supply-side policies expressly designed to improve the workings of the labour market. Part 1 is a comparative analysis showing the effects of monetary and fiscal policy on the economy. Real-wage rigidity in the labour market is shown to have important consequences for the working of both types of policy, because it conditions the economy’s response to tax changes. Part 2 presents an econometric model which combines consistent stock-flow accounts with a full range of expectational effects. Part 3 presents an innovative technique for solving rational expectations models with the need for arbitary terminal conditions.
Author: Derek H. Aldcroft
Publisher: Routledge
ISBN: 1351937901
Category : History
Languages : en
Pages : 315
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Book Description
The themes of this study are the exchange rate regimes chosen by policy makers in the twentieth century, the means used to maintain these regimes, and the impact of these decisions on individual national economies and the world economy in general. The book draws heavily on new research showing the lessons and the legacy left for policy makers by the gold standard and the attempt at its resurrection in the 1920s. In examining issues such as the gold exchange standard, the gold bullion standard, the experience of floating exchange rates, the Bretton Woods arrangements, the EMS and the ERM, and the Currency Board approach, there is a conscious attempt to draw out the relevance of history for policy makers now.
Author: Karl Pauw
Publisher: Intl Food Policy Res Inst
ISBN:
Category : Social Science
Languages : en
Pages : 36
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Book Description
The Malawian economy has in recent months been plagued by a severe foreign exchange crisis, fueled in part by a steadily rising import bill, sharp successive declines in tobacco export prices, the suspension of direct government budget support from several development partners in 2011, and an all-time low in international investor confidence. Up until the regime change in April 2012, the government resisted calls for a devaluation, which at the time resulted in a thriving parallel foreign exchange market. At its peak, the Malawi kwacha was trading at a premium of up to 100 percent in this secondary market. Economic theory shows that such a situation has adverse implications for an economy in terms of the balance-of-payments adjustment process and income distribution in the economy. Those with access to foreign exchange at the official rate are able to extract rents by selling foreign currency or imported goods at inflated prices. Imports sold domestically are then often valued at the parallel exchange rate rather than the official rate, with the parallel market rate serving as the only adjustment mechanism through which equilibrium can be restored in the balance of payments. This has a significant impact on domestic inflation to the detriment of consumers, while those with preferential access to foreign exchange at the official rate capture large rents. A simulation exercise using an economywide model for Malawi considers how the economy responds to different types of foreign exchange shocks under fixed and flexible exchange rate regimes. While the foreign exchange crisis in itself has severe negative implications for the economy, our results suggest that the economy responds much better to these types of shocks under a flexible exchange rate regime (that is, devaluations or a free-floating currency). Our main simulation shows that under the latter policy, gross domestic product growth, although negative, is 1.5 percentage points higher than under a fixed exchange rate policy. Similarly, poverty is 6.9 percentage points lower. A relaxation of the exchange rate policy, however, is only part of the solution; in the longer run, good governance and sound macroeconomic policy that is conducive to growth are needed to address the underlying structural problems in the economy that also contribute to foreign exchange shortages.
Author: Helmut M. Wagner
Publisher: Springer Science & Business Media
ISBN: 3662040824
Category : Social Science
Languages : en
Pages : 385
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Book Description
Globalization and unemployment are two phenomena which are amongst the most widely discussed subjects in the economic debate today. Often, globalization is regarded as being responsible for the increase in unemployment, particularly in unskilled labor. This book deals with the correlation between globalization and unemployment under various aspects: historical aspects of globalization, empirical trends and theoretical explanations of unemployment, effects of globalization in general and of European Monetary Union in particular on umemployment, labor market policy in a global economy, the impact of fiscal policy on unemployment in a global economy, as well as the effects of globalization on inflation and national stabilization policy.
Author: Jon Shields
Publisher: Springer
ISBN: 1349201731
Category : Business & Economics
Languages : en
Pages : 271
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Book Description
A companion text to "Making the Economy Work", this covers aspects of the Employment Institute's published output in its first three years. Based on items produced by the Institute, it explains why alternative action to "monetarism" could have avoided the rise in unemployment in the early 1980s.
Author: Nombulelo Gumata
Publisher: Springer Nature
ISBN: 303066340X
Category : Business & Economics
Languages : en
Pages : 556
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Book Description
This book explores the macro-financial effects of central bank balance sheets, macro-prudential tools, and financial regulation in South Africa. How employment can be maximised while keeping inflation low and stable is examined in relation to the structural changes required to alter the composition of South African bank balance sheets. Quantitative methods and approaches are utilised to highlight the impact of suggested policies. This book aims to outline strategies and policy interventions that can help achieve the National Development Plan in South Africa. It will be of interest to researchers and policymakers working within development economics, African economics, development finance, and financial policy.
Author: Ms.Prachi Mishra
Publisher: International Monetary Fund
ISBN: 1451871929
Category : Business & Economics
Languages : en
Pages : 44
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Book Description
We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981–2005, we find that the elasticity of domestic wages to real exchange rate is 0.1 after a year for countries with high barriers to external labor mobility, but about 0.4 in countries with low barriers to mobility. The results are robust to the inclusion of various controls, different measures of exchange rates, and concepts of labor market integration. These findings call for including labor mobility in macro models of external adjustment.
Author: Victor E. Argy
Publisher: Routledge
ISBN: 1317216792
Category : Business & Economics
Languages : en
Pages : 398
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Book Description
Originally published in 1985 and contributed to by internationally renowned economists, this volume discusses theoretical issues and country-specific experiences to review the underlying causes of the stagflation of the 1970s and early 1980s, as well as summarizing the kinds of macro-policies that were adopted to deal with the stagflation.
Author: Paul R. Masson
Publisher: World Scientific
ISBN: 981435015X
Category : Business & Economics
Languages : en
Pages : 355
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Book Description
This volume provides an integrated compilation of selected major articles published by the author in several fields of international finance. These include contributions to the understanding of currency crises and financial contagion, the evolution of exchange rate regimes, the interaction between national fiscal policies and regional monetary unions, and the effect of uncertainty on the gains from international economic policy coordination. The author spent most of his career doing research at established institutions (the Bank of Canada, OECD, and IMF), and these articles emerged from the need to understand the major economic policy issues of the day. In the book's introduction, the author discusses the motivation for these contributions and the unifying themes that emerged, while a concluding chapter provides his personal reflections and suggestions about promising avenues for further research.
