External Adjustment

Author : Maurice Obstfeld
Publisher :
ISBN 13 :
Total Pages : 64 pages
Book Rating : 4.53/5 ( download)

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Download or read book External Adjustment written by Maurice Obstfeld and published by . This book was released on 2004 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the current account balance increasingly inadequate as a summary of the change in a country's net foreign assets. Nonetheless, unusually large current account imbalances, especially deficits, should remain high on policymakers' list of concerns, even for the richer and less credit-constrained countries. Extreme imbalances signal the need for large and perhaps abrupt real exchange rate changes in the future, changes that might have undesired political and financial consequences given the incompleteness of domestic and international asset markets. Furthermore, of the two sources of the change in net foreign assets -- the current account and the capital gain on the net foreign asset position -- the former is better understood and more amenable to policy influence. Systematic government attempts to manipulate international asset values in order to change the net foreign asset position could have a destabilizing effect on market expectations"--NBER website

Author : United States. Congress. Joint Economic Committee. Subcommittee on Foreign Policy
Publisher :
ISBN 13 :
Total Pages : 160 pages
Book Rating : 4.3X/5 ( download)

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Download or read book U.S. foreign trade: the internal and external adjustment mechanisms. September 29, 30 and October 1, 1970 written by United States. Congress. Joint Economic Committee. Subcommittee on Foreign Policy and published by . This book was released on 1970 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Giuseppe Tullio
Publisher : Springer
ISBN 13 : 1349050482
Total Pages : 148 pages
Book Rating : 4.82/5 ( download)

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Download or read book The Monetary Approach to External Adjustment written by Giuseppe Tullio and published by Springer. This book was released on 1981-06-18 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1451951841
Total Pages : 30 pages
Book Rating : 4.44/5 ( download)

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Download or read book External Adjustment and the Optimal Demand for International Reserves written by International Monetary Fund and published by International Monetary Fund. This book was released on 1989-10-27 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides a theoretical underpinning for the major determinants of optimal reserve demand in the case where fundamental disequilibrium constitutes a key element governing reserve management. Emphasis is given to the role of reserves to smooth the process of economic adjustment by financing part of external disequilibrium, as well as to meet temporary random fluctuations in the excess demand for foreign exchange. The analysis incorporates this financing aspect of reserve holdings into a simple inventory model and discusses the optimal stock of reserves in the context of the optimal mix of adjustment and financing.

Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1451957270
Total Pages : 42 pages
Book Rating : 4.73/5 ( download)

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Download or read book External Adjustment and the Strong Yen written by International Monetary Fund and published by International Monetary Fund. This book was released on 1988-08-09 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: The parameters of a conventional model of Japan’s current account were found to be stable in the period of the steeply rising yen between the fourth quarter of 1985 and the end of 1987. This suggests that Japan’s current account has been adjusting to the strengthening yen in accordance with established historical relationships—a conclusion that is substantiated by the model’s reasonably accurate tracking of the current account in this period. Furthermore, simulations of the model show that the rise in the yen has already made a substantial contribution to correcting Japan’s external imbalance.

Author : Gustavo Adler
Publisher : International Monetary Fund
ISBN 13 : 1513512153
Total Pages : 46 pages
Book Rating : 4.50/5 ( download)

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Download or read book Dominant Currencies and External Adjustment written by Gustavo Adler and published by International Monetary Fund. This book was released on 2020-07-20 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: The extensive use of the US dollar when firms set prices for international trade (dubbed dominant currency pricing) and in their funding (dominant currency financing) has come to the forefront of policy debate, raising questions about how exchange rates work and the benefits of exchange rate flexibility. This Staff Discussion Note documents these features of international trade and finance and explores their implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.

Author : Ryota Nakatani
Publisher : International Monetary Fund
ISBN 13 : 1484331834
Total Pages : 36 pages
Book Rating : 4.35/5 ( download)

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Download or read book External Adjustment in a Resource-Rich Economy: The Case of Papua New Guinea written by Ryota Nakatani and published by International Monetary Fund. This book was released on 2017-12-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: How should resource-rich economies handle the balance of payments adjustment required after commodity price declines? This paper addresses the question theoretically by developing a simple two-period multi-sector model based on Nakatani (2016) to compare different exchange rate policies, and empirically by estimating elasticities of imports and commodity exports with respect to exchange rates using Papua New Guinean data. In the empirical part, using various econometric methods, I find the statistically significant elasticities of commodity exports to real exchange rates. In the theoretical part, by introducing the notion of a shadow exchange rate premium, I show how the rationing of foreign exchange reduces consumer welfare. Using the estimated elasticities and theoretical outcomes, I further discuss policy implications for resource-rich countries with a focus on Papua New Guinea.

Author : Mr.Alberto Behar
Publisher : International Monetary Fund
ISBN 13 : 1484379926
Total Pages : 45 pages
Book Rating : 4.29/5 ( download)

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Download or read book External Adjustment in Oil Exporters written by Mr.Alberto Behar and published by International Monetary Fund. This book was released on 2016-06-08 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: After the decline in oil prices, many oil exporters face the need to improve their external balances. Special characteristics of oil exporters make the exchange rate an ineffective instrument for this purpose and give fiscal policy a sizeable role. These conclusions are supported by regression analysis of the determinants of the current account balance and of the trade balance. The results show little or no relationship with the exchange rate and, especially for the less diversified oil exporters (including the Gulf Cooperation Council), a strong relationship with the fiscal balance or government spending.

Author : Mr.Guy Meredith
Publisher : International Monetary Fund
ISBN 13 : 1451847173
Total Pages : 26 pages
Book Rating : 4.78/5 ( download)

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Download or read book Revisiting Japan's External Adjustment Since 1985 written by Mr.Guy Meredith and published by International Monetary Fund. This book was released on 1993-06-01 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: The factors that explain Japan’s external performance since the mid-1980s are controversial. While the current account surplus eventually declined following exchange rate changes in 1985-86, a widening since 1990 has led to renewed scepticism about the role of relative price movements in bringing about external adjustment. This paper revisits the post-1985 experience to determine whether it can be explained by traditional factors. The results indicate that, over the period as a whole, the behavior of trade volumes and prices was similar to that predicted by traditional relationships. In particular, relative price movements played an important role in reducing the surplus: in their absence, it would have widened further.

Author : Camila Casas
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 81 pages
Book Rating : 4.88/5 ( download)

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Download or read book The Dominant Currency Financing Channel of External Adjustment written by Camila Casas and published by International Monetary Fund. This book was released on 2023-08-11 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide evidence of a new channel through which exchange rates affect trade. Using a novel identification strategy that exploits firms’ maturity structure of foreign currency debt around a large depreciation in Colombia, we show that firms experiencing a stronger debt revaluation of dominant currency debt due to a home currency depreciation compress imports relatively more while exports are unaffected. Dominant currency financing does not lead to an import compression for firms that export, hold foreign currency assets, or are active in the foreign exchange derivatives markets, as they are all hedged against a revaluation of their debt. These findings can be rationalized through the prism of a model with costly state verification and foreign currency borrowing. Quantitatively, the dominant currency financing channel explains a significant part of the external adjustment process in addition to the expenditure switching channel. Pricing exports in the dominant currency, instead of the producer’s currency, mutes the effect of dominant currency financing on trade flows.