Biswajit Banerjee

Bio: Biswajit Banerjee is an academic researcher from Ashoka University. The author has contributed to research in topics: Exchange rate & Subjective well-being. The author has an hindex of 1, co-authored 3 publications receiving 4 citations.

On the Effectiveness of Central Bank Intervention in the Foreign Exchange Market: The Case of Slovakia, 1999–2007

Abstract: Based on intraday high-frequency data, this paper investigates the effect of sterilized interventions on the Slovak koruna/euro exchange rate for different time windows during a period that coincides with Slovakia’s preparation for EU accession and euro adoption. Results confirm a significant relationship between intervention and exchange rate change. The maximum effect of intervention is reflected in the exchange rate change within a couple of hours, and the effect over longer time windows weakens only gradually. The initial impact of sale interventions is stronger than that of purchase interventions.

The Impact of the Exchange Rate and Trade Composition on China’s Trade Balance Vis-à-Vis Selected Partner Countries

Abstract: In a departure from most studies, this paper examines in a multivariate context the influence of both the exchange rate and structural factors on China’s trade balance vis-a-vis selected partner countries. Structural change is proxied by the evolution of the labour skill composition of trade. The empirical findings indicate that China’s large trade surplus cannot be attributed to exchange rate policy alone. The large persistent trade surplus also reflects improvement in non-price competitiveness arising from the fact that China’s exports are rising up the skill ladder and imports are moving down the skill ladder.

Ethnicity and Subjective Well-being in the Republic of North Macedonia

Abstract: This paper examines the nature of inter-ethnic relations in North Macedonia drawing on the 2008 European Quality of Life Survey. Ceteris paribus, the self-declared level of subjective well-being is...

Is foreign exchange intervention effective? The Japanese experiences in the 1990s

Abstract: Monetary History, Exchange Rates and Financial Markets is an impressive collection of original papers in honour of Charles Goodhart's outstanding contribution to monetary economics and policy. Charles Goodhart has written extensively on many of these topics and has become synonymous with his field; the chapters within this book offer a summary of current thinking on his own research subjects and include perspectives on controversies surrounding them.

The effect of the single currency on exports: Comparative firm-level evidence

Abstract: We investigate how adopting the euro affects exports using firm-level data from Slovakia and Estonia. In contrast to previous studies, we focus on countries that adopted the euro individually and had different exchange rate regimes prior to doing so. Following the New Trade Theory we consider three types of adjustment: firm selection, changes in product varieties and changes in the average value of the exports that compose the exports of individual firms. The euro effect is identified by a difference in differences analysis comparing exports by firms to the euro area countries with exports to the EU countries that are not members of the euro area. The results highlight the importance of the transaction costs channel related to exchange rate volatility. We find the euro has a strong pro-trade effect in Slovakia, which switched to the euro from a floating exchange rate, while it has almost no effect in Estonia, which had a fixed exchange rate to the euro prior to the euro changeover. Our findings indicate that the euro effect manifested itself mainly through the intensive margin and that the gains from trade were heterogeneous across firm characteristics.

A Study on the Trade Balance between China and U.S., Based on Cointegration Analysis

Abstract: There has been a long held belief that, the five va riables (the export, the import, the nominal exchan ge rate, the disposable income in China, the disposable income in U.S.) are major factors that affect the trade bala nce between China and U.S. Therefore, this paper has empirically exam ined the impact of five variables on trade balance b tween China and U.S. for the period from 1990 to 2016. The trade ba lance between China and U.S. is regarded as the expla ined variable. The five variables are regarded as the explanatory variable. The cointegration test is employed, to es timate the impact of five variables on trade balance between china and U. S. The broad objective of this paper is, to analyze th impact of five variables on trade balance between China and U.S., ba sed on time series data. The analysis is based on d ata extracted from the World Bank and the National Bureau of Statis ics of the People’s Republic of China. The results s how that, the export, the nominal exchange rate and the U.S.’s di sposable, income have a positive effect on trade ba lance between China and U.S. The China’s disposable income and the import have a negative effect on trade balance, bet ween China and U.S.

The Moses effect: can central banks really guide foreign exchange markets?

Abstract: Central banks seek to guide the foreign exchange market through interventions. However, the success of the central bank in guiding the forex markets, much like the biblical Moses, depends on the differing perceptions and resulting bid–ask spreads of market participants following intervention. Using high-frequency data, we study the behaviour of exchange rate volatility (as reflected in change in bid–ask spreads) following intervention by Reserve Bank of India, India’s central bank. We find that intervention increases the probability of volatility being in higher ranges. Event-wise analysis shows an increase in volatility in shorter time frames and a decrease in volatility over the longer time frame of the day, following intervention.

Current account imbalances and exchange rate volatility: Empirical evidence from Indonesia

Abstract: Whether macroeconomic fundamentals affect the exchange rate volatility in emerging markets with an inflation-targeting regime or not is highly challenging. In this paper, the impact of the current account deficits and foreign reserves on the volatility of real exchange rates. Applying threshold quantile regression models related to Indonesia over the period from 2005(7) to 2021(12), it is concluded that both variables play an important role in controlling the exchange rate instability. Both coefficients are also found to have an upward linear pattern. The asymmetric impact of current account balance holds. Claiming that a two-percent current account deficit in the GDP is the safe amount of the deficit that will not significantly affect the foreign-exchange rate is justified as such. The asymmetric behavior of the current account balance has the potential to trigger real exchange rate volatility, thereby undermining the monetary policy within the framework of the inflation targeting regime. Accordingly, the optimal stock of foreign reserves might avoid imposing dual goals of inflation targeting and exchange rate stability.