The Cape of Good Homes: Exchange Rate Depreciations, Foreign Demand and House Prices

2019 ◽  
Author(s):  
Allan Davids ◽  
Co-Pierre Georg
Keyword(s):  
Exchange Rate ◽  
House Prices ◽  
Foreign Demand

The Effects of Exchange Rate on Export Performance in Tanzania

2020 ◽  
pp. 47-67
Author(s):  
Haroub Hamad Omar ◽  
Nildag Basak Ceylan ◽  
Ayhan Kapusuzoglu
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Export Performance ◽  
Causality Test ◽  
Foreign Demand ◽  
Causality Tests ◽  
Auto Regressive ◽  
Short And Long Term ◽  
Exchange Rate Level

The chapter analyzes the effects of exchange rate of Tanzanian shilling on the country's exports performance applying Vector Auto-Regressive (VAR) model covering the sample period from 1993:Q1 to 2016:Q4. Cointegration and causality tests are performed to investigate the short- and long-term relationships between the variables to evaluate the financial competition. The results show that; there is no long-term relationship (cointegration) between exchange rates and exports and between foreign demand and exports. Moreover, the results of causality test show no short-term relationship (causality) between exchange rates and exports and between foreign demand and exports. As the findings suggest, the exchange rate level of Tanzanian shilling (in nominal terms) does not statistic-significantly affect the country's exports performance.

scholarly journals The Role of Monetary Policy in Transmission of Asset Prices into Goods Prices

2020 ◽  
Vol 4 (1) ◽  
pp. 143-167
Author(s):  
Sidra Mariyam ◽  
Wasim Shahid Malik
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Stock Prices ◽  
Asset Prices ◽  
Inflation Rate ◽  
House Prices ◽  
Asset Price ◽  
Price Inflation

Monetary policy in the contemporary world reacts, through short term interest rate, to deviations of inflation rate and output from their respective targets, while asset prices are responded to the extent they contribute to these deviations. This practice significantly affects transmission of asset prices into goods prices, which has serious implications for income distribution. This paper sets the objectives of estimating transmission of asset prices into goods prices and the role of monetary policy in influencing this transmission. In this regard, the paper hypothesizes that inflation rate positively responds to asset prices and this response weakens if interest rate leans against the winds of inflation, output and asset prices. To test these hypotheses, we have estimated different specifications of vector autoregressive (VAR) model and impulse response functions have been found after identifying structural shocks. Data of Pakistan’s economy on inflation rate, large scale manufacturing index, interest rate and asset price index – comprising house prices, stock prices and exchange rate – are used for the time period 2000m01 to 2019m06. We find evidence in support of both hypotheses; asset price inflation positively transmits into goods price inflation and this transmission intensifies if interest rate does not respond to other variables in the model. Moreover, transmission of asset prices into inflation rate, as compared to output, is influenced more by monetary policy. Finally, we find that the transmission of exchange rate and house prices to inflation rate are very much affected by monetary policy while in case of stock prices the influence of policy is moderate.

scholarly journals Effects Of Exchange Rate Volatility On Real Estate Prices In Developing Economies, A Case Of Ghana

2019 ◽  
Vol 6 (11) ◽  
pp. 268-287
Author(s):  
John Kwame Adu Jack ◽  
Frimpong Okyere ◽  
Emmanuel K. S. Amoah
Keyword(s):  
Exchange Rate ◽  
Real Estate ◽  
Developing Economies ◽  
Negative Impact ◽  
House Prices ◽  
Housing Prices ◽  
Exchange Rate Volatility ◽  
Bounds Testing ◽  
Long Run ◽  
Real Estate Prices

This study aims to find out whether exchange rate volatility affects real estate domestic house prices in Ghana. To this end, a 32 years secondary data from World Development Indicators (WDI) and data from Real Estate Developers in Ghana are employed for the study. The study employs Autoregressive distributed lags (ARDL) bounds testing of cointegration t o test the null hypothesis that exchange rate volatility has n o impact on real estate housing prices. The study finds that real estate price is cointegrated with remittances, exchange rate and inflation. The long run equilibrium is stable and significant. Exchange rates d o not cause changes in real estate prices in both short and long run. Similarly past prices of real estate d o not have impact on current house prices.  Rather, remittances positively cause real estate prices. Inflation on its part has a negative impact on real estate prices. It is therefore concluded that, volatility in the exchange rate between the cedi and other trading currencies does not predict changes in real estate prices.

scholarly journals Home away from home? Foreign demand and London house prices

2018 ◽  
Vol 130 (3) ◽  
pp. 532-555 ◽  
Author(s):  
Cristian Badarinza ◽  
Tarun Ramadorai
Keyword(s):  
House Prices ◽  
Foreign Demand

How do manufacturing exports react to the real exchange rate and foreign demand? The Chilean case

World Economy ◽  
2019 ◽  
Vol 43 (1) ◽  
pp. 274-300
Author(s):  
Jorge A. Fornero ◽  
Miguel A. Fuentes D. ◽  
Andrés Gatty Sangama
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
The Real ◽  
Foreign Demand

scholarly journals Essays on modern economic issues in international trade, exchange rates and housing

2021 ◽  
Author(s):  
◽  
Karam Shaar
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Data Quality ◽  
High Frequency ◽  
Bilateral Trade ◽  
House Prices ◽  
Housing Wealth ◽  
Frequency Data ◽  
Trade Data ◽  
The Impact

<p>The common theme of the three papers in this thesis is the focus on the impact of data choices on empirical research in Economics. Such choices can be about the source of data; should we source the data from country A or country B in a bilateral trade relation? Is there a way to reconcile the discrepancies in international trade data? In investigating the impact of exchange rate on trade, should we choose high-frequency or low-frequency data? What does the choice of a certain frequency imply for the econometric analysis? In assessing the impact of housing wealth on household consumption, what are the benefits of choosing household-level data? How can we take advantage of aggregate data on house prices to circumvent the endogeneity arising from household-specific confounding factors? This thesis shows that data choices can strongly affect our conclusions regarding several modern economic issues.  The first paper is titled ‘Reconciling International Trade Data.’ International trade data are filled with discrepancies–where two countries report different values of trade with each other. We develop an index for ranking countries’ data quality based on the following notion: the more a country’s reports on bilateral trade differ from the corresponding reports of its partners, the more likely it is a low-quality reporter. We calculate the comparative quality for each country’s imports and exports separately for every year from 1962 to 2016. We reconcile international trade data through picking the value reported by the country with higher quality in every bilateral flow. The findings include: (a) global trade was under-reported by roughly 5% over the past five years as countries with low data quality under-report both, their imports and exports; (b) erroneous reporting is prevalent among low-quality reporters; (c) importers’ data are less likely to be in error; (d) the level of development and corruption are possible determinants of trade data quality; (e) low-quality reporters are 14% more open to trade using reconciled data than using self-reported data (f) China tends to under-report its exports and over-report its imports, while there is only a small difference between US self-reported and reconciled data. The reconciled trade dataset is made freely available for future studies to use.  The second paper is titled ‘Why You Should Use High Frequency Data to Test the Impact of Exchange Rate on Trade.’ The paper suggests that testing the impact of exchange rate on trade should be done using high frequency data. Using different data frequencies for identical periods and specifications between the US and Canada, the paper shows that low frequency data suppresses and distorts the evidence of the impact of exchange rate on trade in the short-run and the long-run.  The third paper is titled: ‘Housing Leverage and Consumption Expenditure: Evidence from New Zealand Microdata.’ The paper investigates how household debt affects the marginal propensity to consume out of housing wealth. The paper uses New Zealand household-level data on spending, income, and debt over the period 2006–2016. The main empirical challenge is to identify exogenous variation in house prices to determine how consumption evolves with movements in household wealth. This identification problem is complicated by the presence of unobserved household characteristics that are correlated with housing wealth. The paper uses a detailed house sale dataset to derive local average house prices and use it as an instrument. The empirical results show that the estimated elasticity of consumption spending to housing wealth is about 0.22%. In dollar terms, the average marginal propensity to consume out of a one-dollar increase in housing wealth is around 2.2 cents. The empirical results confirm that household indebtedness, especially mortgage debt, acts as a drag on consumption spending, not only through the debt overhang channel, but also through influencing the collateral channel of the housing wealth effect.</p>

Sign in / Sign up

Export Citation Format

Share Document