scholarly journals Exchange Rate Regime, Financial Market Bubbles and Long-term Growth in China: Lessons from Japan

2017 ◽  
Vol 25 (1) ◽  
pp. 32-57 ◽  
Author(s):  
Gunther Schnabl
Keyword(s):  
Exchange Rate ◽  
Financial Market ◽  
Exchange Rate Regime

HOW THE EXCHANGE RATE REGIME AFFECTS ADJUSTMENT TO LARGE OIL PRICE SWINGS IN OIL EXPORTING COUNTRIES

2021 ◽  
Author(s):  
MAJED S. ALMOZAINI
Keyword(s):  
Exchange Rate ◽  
Money Supply ◽  
Government Spending ◽  
Exchange Rate Regime ◽  
Exchange Rate Regimes ◽  
Oil Price ◽  
Fixed Exchange Rate ◽  
Floating Exchange Rate ◽  
The Exchange Rate

The aim of this study is to analyze how oil price shocks affect the economic growth of floating exchange rate regimes and fixed exchange rate regimes in oil-exporting countries with a ratio of oil exports to total exports exceeding 70%. Also, this study seeks to determine what monetary and fiscal policies both regimes apply in order to curb business cycles and reduce inflationary and recessionary gaps. The analytical study uses panel data for the period from 1991 to 2019, covering 24 oil-exporting countries, from the World Economic Outlook (WEO) database and World Bank. The econometric model is estimated by applying a panel VECM to examine the short- and long-term interdependencies in the macroeconomic variables. The results demonstrate that when there is a negative shock to the oil price, the exchange rate of the floating exchange rate regimes depreciates, money supply increases, and government spending decreases. In contrast, the exchange rate of the fixed exchange rate regimes fluctuates slightly; the money supply slightly decreases in the near, medium, and long term; and government spending decreases.

Cryptocurrencies: the Main Tendencies of Development in Russia at the Present Stage

2018 ◽  
Vol 5 (6) ◽  
pp. 54-60
Author(s):  
Светлана Оголихина ◽  
Svetlana Ogolihina
Keyword(s):  
Exchange Rate ◽  
Comparative Analysis ◽  
Financial Market ◽  
Present Stage ◽  
Foreign Countries ◽  
The World

In the article the research directed to detection of tendencies of development of cryptocurrencies in the world financial market on the base of which dynamics of cryptocurrencies in Russia and foreign countries is predicted is conducted. As three most perspective virtual currencies are selected by the author: Bitcoin, Ethereum and Litecoin. On the basis of carrying out the comparative analysis features, advantages and shortcomings of each of cryptocurrencies are revealed, dynamics of their capitalization for last period of 2017 is analyzed.The innovative technological frameworks created on the database of cryptocurrencies are considered, assessment of their efficiency is carried out. As a result of the conducted research the author offered own forecast of development of three cryptocurrencies based on the optimistic scenario till 2019. Within the forecast dynamics of growth of exchange rate in the long term and possible risks for investors is designated. In the inference conclusions are drawn and the main tendencies of development of cryptocurrencies in a pattern are defined.

scholarly journals USE OF (HARD AND SOFT) PEGGED EXCHANGE RATE REGIMES ON THE PATH TO EUROPEAN INTEGRATIONS IN TERMS OF CRISIS

2018 ◽  
pp. 250-266
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Exchange Rate Regimes ◽  
Exchange Rate Policy ◽  
External Shocks ◽  
Exchange Rate Fluctuations ◽  
Accession Countries ◽  
Rate Policy ◽  
Pros And Cons

Important aspect of ongoing discussions on the choice of exchange rate regime is its reaction to crisis as a strong and unexpected external shock; such was the case of Great Recession from 2008.-onwards. It is generally accepted that pegged exchange rate regimes are more sensitive to external shocks that might cause their long-term destabilization. Still, the soft pegged regimes (also entitled intermediate regimes) have fewer limits, with rules that allow more maneuver space for national strategy. The group of soft pegged regimes is wider, both in structure and scope, then those of hard pegged regimes. While countries with more flexible regimes might use exchange rate fluctuations as automatic stabilisator, (hard and/or soft) pegs impose some limitations. In the first place, there is stability goal that, in combination with strict regulatory rules, limits the monetary and exchange rate policy, demanding the use of other strategies, such is the internal devaluation. Secondly, these countries do not use wide scope of instruments and their crisis strategy is more rigid than those of other regimes. Finally, there are dilemmas on the optimality of exchange rate strategy during the pre-eurozone membership period, including the euro introduction strategy. These dilemmas deepen in terms of crisis. This paper focuses on comparison of hard and soft pegged regimes (the latter also entitled intermediate regimes) in selected European union accession countries, using „de facto“classification scale developed by International Monetary Fund. Despite the crisis, there have not been dramatic turbulences in terms of exchange rate policy in observed countries, but the general economic indicators clearly show the real depth of crisis and slow recovery. The question open for further discussion is whether such regimes should be obtained or abandoned during the crisis and what is their contribution to national economy. Furthermore, there are pros and cons of possible strategies, considering the European integration process.

Exchange Rate Flexibility, Financial Market Openness, and Economic Growth

2018 ◽  
Vol 17 (1) ◽  
pp. 145-162 ◽  
Author(s):  
Il Houng Lee ◽  
Kyunghun Kim
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Financial Market ◽  
Policy Option ◽  
Policy Coordination ◽  
Exchange Rate Policy ◽  
Growth Effect ◽  
Exchange Rate Flexibility ◽  
Rate Policy

We investigate the effect of exchange rate flexibility on economic growth. We find that exchange rate flexibility negatively affects economic growth, but this effect varies with the degree of financial market openness. Countries with high financial market openness benefit from maintaining high exchange rate flexibility, whereas the opposite is true for countries with low financial market openness. This empirical result implies that policymakers should consider the long-term growth effect when formulating exchange rate policy as it could be a useful policy option for emerging markets with limited policy independence. This is particularly relevant to policy coordination since greater exchange rate flexibility alone cannot solve the global imbalance.

scholarly journals Fiscal Policy in a Floating Exchange Rate Regime with Consumption Home Bias

2016 ◽  
Vol 8 (6) ◽  
pp. 24
Author(s):  
Chung-Fu Lai ◽  
Wen-Fang Wang
Keyword(s):  
Exchange Rate ◽  
Open Economy ◽  
Simulation Analysis ◽  
Exchange Rate Regime ◽  
Home Bias ◽  
Terms Of Trade ◽  
Long Term Effects ◽  
Theoretical Derivation ◽  
Fiscal Spending

This paper presents New Open Economy Macroeconomics as the analytical framework in attempt to explore the long term effects of fiscal expenditure shocks on various macroeconomic variables (e.g. consumption, output, prices, exchange rate, terms of trade), and tries to explain the role that consumption home bias plays. With theoretical derivation and simulation analysis, we find that in the long-term, an increasing in fiscal spending will cause rise of domestic output, domestic price index and the exchange rate, but it will crowd out domestic private consumption, the relationship between fiscal spending and the terms of trade, which is depending on asymmetry of consumption bias behavior of consumers between countries.

The Politics of Exchange Rate—Based Stabilization Versus Structural Reforms in Latin America

2009 ◽  
Vol 42 (9) ◽  
pp. 1193-1216 ◽  
Author(s):  
Cameron G. Thies ◽  
Moises Arce
Keyword(s):  
Latin America ◽  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Sustainable Growth ◽  
Structural Reforms ◽  
Policy Makers ◽  
Policy Choices ◽  
Alternative Hypotheses ◽  
Comprehensive Test

In the 1990s, the choice of an appropriate exchange rate regime began to capture the attention of policy makers across Latin America. Several countries pegged their currency to the U.S. dollar or even officially substituted the dollar for their national currency. Although economists and political scientists have made piecemeal contributions to the understanding of such policy choices, the literature currently lacks an integrated theoretical framework and a comprehensive test of alternative hypotheses. This study seeks to rectify these gaps in the literature by arguing that policy makers see the implementation of fixed exchange rate regimes as a politically expedient commitment device that allows them to avoid adopting more difficult long-term adjustment policies designed to attain macroeconomic stability and sustainable growth. This hypothesis is tested with alternative hypotheses put forward in the burgeoning literature on exchange rate regime choice. Theoretical expectations are supported by the results of several logit models, which confirm some previous findings in the literature.

Exchange Rate Regimes and Economic Stability

2010 ◽  
pp. 29-43
Author(s):  
S. Smirnov
Keyword(s):  
Exchange Rate ◽  
Inflation Targeting ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Real Sector ◽  
Economic Stability ◽  
Exogenous Shocks ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
Managed Floating

The Bank of Russia intends to introduce inflation targeting policy and exchange rate free floating regime in three years. Exogenous shocks absorption which stabilizes the real sector of economy is usually considered to be one of the advantages of free floating exchange rate policy. However, our research based on the analysis of 25 world largest economies exchange rates and industrial production during the crisis of 2008-2009 does not confirm this hypothesis. The article also analyzes additional risks associated with free floating exchange rate regime in Russia and presents some arguments in favor of managed floating exchange rate regime.

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