Capital Flows, Interest Rates and the Real Exchange Rate in a Small Semi-open Economy
Author : Paul D McNelis
Publisher :
Page : 94 pages
File Size : 21,87 MB
Release : 1988
Category : Capital movements
ISBN :
Author : Paul D McNelis
Publisher :
Page : 94 pages
File Size : 21,87 MB
Release : 1988
Category : Capital movements
ISBN :
Author : Mr.Alexander W. Hoffmaister
Publisher : International Monetary Fund
Page : 50 pages
File Size : 17,90 MB
Release : 1996-12-01
Category : Business & Economics
ISBN : 1451855877
This paper examines the links between capital inflows and the real exchange rate under pegged exchange rates. The analytical framework is described, and a near-VAR model linking capital inflows, interest rate differentials, government spending, money base velocity, and the temporary component of the real exchange rate (TCRER) is estimated for Korea, Mexico, the Philippines, and Thailand. TCRER movements are associated only weakly with shocks to capital flows. Negative shocks to U.S. interest rates lead to capital inflows in Asia and a TCRER appreciation in the Philippines and Thailand. Positive shocks to government spending have a small but statistically significant effect on the TCRER for Korea.
Author : Rebecca Driver
Publisher : Routledge
Page : 456 pages
File Size : 26,3 MB
Release : 2013-04-15
Category : Business & Economics
ISBN : 1134261977
Combining thorough scholarship with illuminating real-world examples, this edited collection provides insights on the causes and consequences of movements in both exchange rates and external assets and has a strong focus on the policy implications of operating in an open economy, particularly the choice of exchange rate and monetary policy, exchange rate intervention and policies on capital mobility.
Author : Paul D. McNelis
Publisher :
Page : 62 pages
File Size : 49,41 MB
Release : 1988
Category : Capital movements
ISBN :
Author : Mr.Tidiane Kinda
Publisher : International Monetary Fund
Page : 35 pages
File Size : 19,95 MB
Release : 2011-01-01
Category : Business & Economics
ISBN : 1455211877
This paper analyzes the impact of capital inflows and exchange rate flexibility on the real exchange rate in developing countries based on panel cointegration techniques. The results show that public and private flows are associated with a real exchange rate appreciation. Among private flows, portfolio investment has the highest appreciation effect-almost seven times that of foreign direct investment or bank loans-and private transfers have the lowest effect. Using a de facto measure of exchange rate flexibility, we find that a more flexible exchange rate helps to dampen appreciation of the real exchange rate stemming from capital inflows.
Author : Carlos Hurtado-Lopez
Publisher :
Page : 346 pages
File Size : 20,58 MB
Release : 1986
Category : Budget deficits
ISBN :
Author : Michael Parkin
Publisher : Manchester University Press
Page : 316 pages
File Size : 42,3 MB
Release : 1978
Category : Currency question
ISBN : 9780719007125
Author : Gaetano Antinolfi
Publisher :
Page : 64 pages
File Size : 41,48 MB
Release : 1997
Category : Foreign exchange rates
ISBN :
Author : Pierre-Richard Agenor
Publisher :
Page : 50 pages
File Size : 17,67 MB
Release : 2006
Category :
ISBN :
This paper examines the links between capital inflows and the real exchange rate under pegged exchange rates. The analytical framework is described, and a near-VAR model linking capital inflows, interest rate differentials, government spending, money base velocity, and the temporary component of the real exchange rate (TCRER) is estimated for Korea, Mexico, the Philippines, and Thailand. TCRER movements are associated only weakly with shocks to capital flows. Negative shocks to U.S. interest rates lead to capital inflows in Asia and a TCRER appreciation in the Philippines and Thailand. Positive shocks to government spending have a small but statistically significant effect on the TCRER for Korea.
Author : Mr.Nicolas E. Magud
Publisher : International Monetary Fund
Page : 24 pages
File Size : 50,54 MB
Release : 2012-02-01
Category : Business & Economics
ISBN : 1463936427
The prospects of expansionary monetary policies in the advanced countries for the foreseeable future have renewed the debate over policy options to cope with large capital inflows that are, at least partly, driven by low interest rates in the financial centers. Historically, capital flow bonanzas have often fueled sharp credit expansions in advanced and emerging market economies alike. Focusing primarily on emerging markets, we analyze the impact of exchange rate flexibility on credit markets during periods of large capital inflows. We show that bank credit grows more rapidly and its composition tilts to foreign currency in economies with less flexible exchange rate regimes, and that these results are not explained entirely by the fact that the latter attract more capital inflows than economies with more flexible regimes. Our findings thus suggest countries with less flexible exchange rate regimes may stand to benefit the most from regulatory policies that reduce banks' incentives to tap external markets and to lend/borrow in foreign currency; these policies include marginal reserve requirements on foreign lending, currency-dependent liquidity requirements, and higher capital requirement and/or dynamic provisioning on foreign exchange loans.