Exchange Rate Flexibility and Credit During Capital Inflow Reversals: Purgatory…Not Paradise

2014 ◽  
Author(s):  
Nicolas E. Magud ◽  
Esteban Rodrigo Vesperoni
Keyword(s):  
Exchange Rate ◽  
Capital Inflow ◽  
Exchange Rate Flexibility

Foreign Capital Inflow and Real Exchange Rate Appreciation in Developing Economies: Theory and Empirical Evidence

2014 ◽  
Vol 14 (03n04) ◽  
pp. 453-465
Author(s):  
Anindya Biswas ◽  
Biswajit Mandal ◽  
Nitesh Saha
Keyword(s):  
Exchange Rate ◽  
Global Economy ◽  
Foreign Capital ◽  
Factor Model ◽  
Developing Economies ◽  
Capital Inflow ◽  
Specific Factor ◽  
Export Sector ◽  
The Exchange Rate ◽  
Sectoral Composition

Foreign direct investment specially targeted to export sector is relatively new phenomenon in the global economy. Such inflow of foreign capital changes the sectoral composition of the economy, and it has some influence on the exchange rate of the destination country. In this study, we attempt to provide underlying theoretical and empirical explanations for exchange rate appreciation due to foreign capital inflow. We first use an extended three-sector specific factor model to explain analytically why and how an inflow of foreign capital boosts the price of a nontradable good that helps tilting the exchange rate in favor of the host country and then conduct an empirical analysis based on a panel dataset of 12 prominent developing countries over the time period 1980–2011 to substantiate our theoretical findings. We also strive to look at the possible consequences on factor prices and on sectoral de-composition of a representative economy.

scholarly journals EXCHANGE RATE FLEXIBILITY, CAPITAL MOBILITY AND INFLATION TRANSMISSION IN MALAYSIA

2009 ◽  
Vol 8 (1) ◽  
Author(s):  
Mansor H. Ibrahim
Keyword(s):  
Exchange Rate ◽  
Capital Mobility ◽  
Exchange Rate Regime ◽  
Flexible Exchange Rate ◽  
International Transmission ◽  
Exchange Rate Flexibility ◽  
The Us ◽  
Small Economy ◽  
Inflation Transmission ◽  
Limited Exchange

The paper assesses the international transmission of inflation for a small economy, Malaysia, over three sample periods marked by different degrees of exchange rate flexibility. Contradicting to conventional wisdom of less pronounced foreign nominal influences under the flexible exchange rate regime, this research finds evidence that the inflation transmission from the US to Malaysia is strongest during the period marked by increasing exchange rate flexibility (i.e. 1993-1998). This research also observes significant inflation effects of exchange rate depreciation during the same period. While this research observe less pronounced impacts of the US during the limited exchange rate flexibility period (i.e. 1988-1999), the US influences are virtually absent during the recent fixed regime (i.e. 1998-2005). This research believes that the intensity of capital flows across the three periods might have explained the results.

scholarly journals Capital inflows, exchange rate and agricultural output in Nigeria

2019 ◽  
Vol 5 (1) ◽  
Author(s):  
Fredrick Ikpesu ◽  
Abraham Emmanuel Okpe
Keyword(s):  
Exchange Rate ◽  
Foreign Capital ◽  
Public Capital ◽  
Capital Inflow ◽  
Capital Inflows ◽  
Private Capital ◽  
Agricultural Output ◽  
Long Run ◽  
The Government ◽  
Exchange Rate Depreciation

AbstractThe study applied the autoregressive distributed lag (ARDL) technique in investigating the effect of capital inflows and exchange rate on agricultural output in Nigeria between the periods 1981 and 2016. The technique was selected because the variables are integrated at both 1(1) and 1(0) and the sample size is considerably small. Variables used in the study are agricultural output (AO), private capital inflow (PRCI), public capital inflow (PUBCI), investment (INV), labor (L) and real effective exchange rate. Findings from the empirical research revealed that the variables are cointegrated. The research outcome also indicates that in the short run and long run, private capital inflow and public capital inflow positively affect the country agricultural output. The study also revealed that exchange rate depreciation would cause agricultural output to decline in the short and long run. Based on the research findings, it is recommended that the government should create an enabling and conducive environment to attract more inflows of foreign capital into the country to boost the agricultural output. Also, monetary authority should ensure the stability of the country’s exchange rate (Naira) since exchange rate depreciation affects agricultural output negatively. Furthermore, there is the need for the harmonization of foreign capital inflow policy and monetary policy by the government, taking into consideration the optimal level of capital inflow that will not have a detrimental effect on exchange rate so as to ensure sustainable growth in agricultural output.

The Determinants of Exchange Rate Flexibility: An Empirical Investigation

1979 ◽  
Vol 61 (3) ◽  
pp. 327 ◽  
Author(s):  
Paul Holden ◽  
Merle Holden ◽  
Esther C. Suss
Keyword(s):  
Exchange Rate ◽  
Empirical Investigation ◽  
Exchange Rate Flexibility
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