Sector Specific Inflow of Foreign Capital, Non-Traded Sector and Implications for Real Exchange Rate

2017 ◽  
Author(s):  
Biswajit Mandal ◽  
Anindya Biswas ◽  
Prasun Bhattacharjee
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Foreign Capital

scholarly journals The Limits to Dollarization in Ecuador: Lessons from Argentina

2011 ◽  
pp. 457-462
Author(s):  
Matias Vernengo ◽  
Mathew Bradbury
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Current Account ◽  
Foreign Capital ◽  
External Financing ◽  
Twin Deficits ◽  
The Us ◽  
Financing Gap ◽  
Us Dollar

The paper draws lessons from the failed Argentine experience with convertibility to highlight the dangers of dollarization in Ecuador. Argentina’s currency peg to the US dollar was successful in reducing inflation but given the overvalued real exchange rate, created burgeoning twin deficits and a chronic dependency on foreign capital. Ecuador too suffers from chronic current account imbalance. In contrast to Argentina, Ecuador seems to be relying on remittance income to close its external financing gap. Though perhaps this model is less unstable than that of relying on foreign capital it is no more sustainable. The paper closes with a realistic critique of thisdevelopment strategy.

scholarly journals Foreign Capital in Russia and Hong Kong: Postmortem of International Financial Crisis

2010 ◽  
Author(s):  
Şaziye Gazioğlu ◽  
Ülkem Başdaş
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Theoretical Model ◽  
Financial Crisis ◽  
Real Exchange Rate ◽  
Stock Returns ◽  
Capital Flows ◽  
Foreign Capital ◽  
Capital Inflows ◽  
International Financial Crisis

This paper studies the relation among real stock returns, real capital flows and real exchange rate starting from a theoretical model. The model predicts that the capital inflows affect the real exchange rate and stock returns. Besides, there is an asymmetry between the effect of capital inflows and outflows on real exchange rate causing a “Debt Trap”. In this paper, we compare the evidence from Russia and Hong Kong. The empirical findings confirm the theoretical model for all three countries.

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