scholarly journals Adjustment patterns to commodity terms of trade shocks: the role of exchange rate and international reserves policies

2011 ◽  
Author(s):  
Joshua Aizenman ◽  
Sebastian Edwards ◽  
Daniel Riera-Crichton
Keyword(s):  
Exchange Rate ◽  
Terms Of Trade ◽  
International Reserves ◽  
Trade Shocks

scholarly journals CADANGAN DEVISA, FINANCIAL DEEPENING DAN STABILISASI NILAI TUKAR RIIL RUPIAH AKIBAT GEJOLAK NILAI TUKAR PERDAGANGAN

2009 ◽  
Vol 11 (2) ◽  
Author(s):  
Priadi Asmanto ◽  
Sekar Suryandari
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
South Korea ◽  
Real Exchange Rate ◽  
Shock Absorber ◽  
Terms Of Trade ◽  
Buffer Stock ◽  
International Reserves ◽  
Financial Deepening ◽  
The Real

These papers analyze the influence of the international reserves and the financial deepening on the real exchange rate stabilization due to the terms of trade shock. The analysis covers 6 countries with quarterly data (Indonesia, United States, Japan, Hong Kong, Singapore and South Korea during the period of 2000.1 to 2006.4). This research utilizes the international reserves mitigation and the financial deepening mitigation model.This result shows that the reserves mitigation terms variable plays important role as the real exchange rate stabilization regarding the terms of trade shock in a common sample, but not in specific country. The mitigation effect associated with international reserves (buffer stock effect) applies only in South Korea. While for United State and Indonesia mitigation effect associated with international reserves opposite way. Even for Hong Kong, Japan and Singapore, the mitigation effect does not have significant induces real exchange rate stability.Furthermore, the financial deepening mitigation terms variable cannot be treated as the real exchange rate stabilization in a common sample, but not specific country. The mitigation effect associated with financial deepening (shock absorber effect) applies only in United States and Indonesian economic, while for South Korea the mitigation effect associated with the financial deepening works in opposite way. Even for Hong Kong, Japan and Singapore, the mitigation effect of financial deepening does not have significant induces real exchange rate stability.In Indonesian economic, the financial deepening is more effective than the international reserve to create the real exchange rate stability. The shock absorber effect in Indonesia is more effective than the buffer stock effect to stabilize the real exchange rate due to the terms of trade shock.JEL Classification: E44, F31, F32Keywords:International reserves, buffer stock, financial deepening, shock absorber, terms of trade shock, real exchange rate.

scholarly journals Thoughts on balance-of-payments-constrained growth after 40 years

2019 ◽  
Vol 7 (4) ◽  
pp. 554-567 ◽  
Author(s):  
A.P. Thirlwall
Keyword(s):  
Growth Rate ◽  
Exchange Rate ◽  
Dynamic Model ◽  
Terms Of Trade ◽  
Balance Of Payments ◽  
Capital Inflows ◽  
Closed Economy ◽  
Income Elasticities ◽  
Long Run

This paper considers how Thirlwall's balance-of-payments-constrained growth model has fared over the preceding 40 years. Issues dealt with include how the model fits into Harrod's closed-economy dynamic model; whether the model is a tautology; the role of the exchange rate and terms of trade in influencing the long-run growth rate, and whether capital inflows make any difference to the long-run predictions of the model. The conclusion is that it is mainly the structure of production and trade that determines the long-run growth rate of countries, within a balance-of-payments equilibrium framework, as determinants of the income elasticities of demand for exports and imports.

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