Topic
Currency
About: Currency is a research topic. Over the lifetime, 26697 publications have been published within this topic receiving 485370 citations. The topic is also known as: monetary unit & unit of money.
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TL;DR: This paper reviewed the origins and definitions of the concept of social capital as it has developed in the recent literature and examined the limitations of this concept when interpreted as a causal force able to transform communities and nations.
Abstract: The purpose of this commentary is threefold. First, to review the origins and definitions of the concept of social capital as it has developed in the recent literature. Second, to examine the limitations of this concept when interpreted as a causal force able to transform communities and nations. Third, to present several relevant examples from the recent empirical literature on Latin American urbanisation and migration. These examples point to the significance of social networks and community monitoring in the viability of grass-roots economic initiatives and the simultaneous difficulty of institutionalising such forces.Current interest in the concept of social capital in the field of national development stems from the limitations of an exclusively economic approach toward the achievement of the basic developmental goals: sustained growth, equity, and democracy. The record of application of neoliberal adjustment policies in less developed nations is decidedly mixed, even when evaluated by strict economic criteria. Orthodox adjustment policies have led to low inflation and sustained growth in some countries, while in others they have failed spectacularly, leading to currency crises, devaluations, and political instability. The ‘one-size-fits-
all’ package of economic policies foisted by the International Monetary Fund and the US Treasury on countries at very different levels of development have led to a series of contradictory outcomes that orthodox economic theory itself is incapable of explaining.
627 citations
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22 Sep 2000
TL;DR: In this paper, a plane ride I took from China to the United States in 1996, I came across one story about the high level of official corruption in China, and another that extolled the extraordinarily large flow of foreign direct investment into China that year.
Abstract: THE RESEARCH REPORTED in this paper was inspired by a plane ride I took from China to the United States in 1996. Browsing the newspapers and in-flight magazines, I came across one story about the high level of official corruption in China, and another that extolled the extraordinarily large flow of foreign direct investment (FDI) into China that year.(1) Later in the flight, I struck up a conversation with the passenger sitting next to me, an American business executive who had just visited his joint venture firm in China. I asked him whether the corruption problem in China affected him and his business. He said that it did and went on to explain the myriad problems that his firm had encountered in dealing with corruption and bureaucratic red tape. During and after that flight, I reflected on whether corruption has generally worked as a beneficial "grease," a minor annoyance, or a major obstacle for international investors. In this paper I address three interrelated issues. First, does corruption reduce inward FDI? Second, is China an exceptional case in which corruption does not do much harm? Third, does corruption distort the composition of capital inflows in a way that might raise the likelihood of a currency crisis? International direct investment reached $3.5 trillion in 1997. A small number of countries in the industrial world account for the bulk--about 68 percent--of this investment.(2) Yet international direct investment is especially important for developing countries, for which it is not only a source of scarce capital but also an important conduit for the transfer of technological and managerial know-how.(3) The recent currency crises in East Asia, Russia, and Latin America have highlighted the importance of the composition of capital flows for developing countries. Before I attempt to explain the relationship between corruption and the composition of capital inflows, it is worth noting that there are at least two views on the causes of these crises. One increasingly widespread view is that so-called crony capitalism--the misallocation of financial resources to the friends and relatives of government officials--is partly responsible. However, there is so far virtually no systematic evidence to support or reject this hypothesis.(4) The other view is that the confidence of international creditors in developing economies is fragile, so that small changes in the outlook can give rise to self-fulfilling expectations of a crisis. These two explanations are typically presented as rivals, but there may be a link between them. The extent of corruption in a country may affect that country's composition of capital inflows in a way that makes it more vulnerable to shifts in international creditors' expectations. Corruption here refers to the extent to which firms or individuals need to pay bribes to government officials to obtain permits, licenses, loans, or other government services needed to conduct business in a country.(5) Several studies have shown that the composition of international capital inflows is correlated with the incidence of currency crises.(6) They have found that the lower the share of FDI in total capital inflows, or the higher the ratio of short-term debt to reserves, the more likely a currency crisis becomes. One possible reason is that bank lending or other portfolio investment may be driven more by sentiment than direct investment is. Hence a small, unfavorable change in the recipient country's fundamentals may cause a large swing in portfolio capital flows, from massive inflows to massive outflows. This can strain the country's currency or financial system sufficiently to cause or hasten its collapse.(7) To my knowledge, no studies have examined the connection between corruption (or the intrusiveness of national bureaucracy more generally) and the composition of capital inflows. This paper seeks to fill that void. A small number of previous papers have looked at the effect of corruption on FDI. …
625 citations
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TL;DR: In this article, the authors investigate pricing to market when the exchange rate changes in cases where firms' future demands depend on their current market shares and show that profit maximizing foreign firms may either raise or lower their domestic currency export prices when the domestic exchange rate appreciates temporarily.
Abstract: We investigate pricing to market when the exchange rate changes in cases where firms' future demands depend on their current market shares. We show that i) profit maximizing foreign firms may either raise or lower their domestic currency export prices when the domestic exchange rate appreciates temporarily (i.e. the "pass-through" from exchange rate changes to import prices may be perverse); ii) current import prices may be more sensitive to the expected future exchange rate than to the current exchange rate; iii) current import prices fall in response to an increase in uncertainty about the future exchange rate. We present evidence that suggests the behavior of expected future exchange rates may provide a clue to the puzzling behavior of U.S. import prices during the 1980s.
620 citations
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TL;DR: It is found that the Bitcoin forms a unique asset possessing properties of both a standard financial asset and a speculative one.
Abstract: The Bitcoin has emerged as a fascinating phenomenon in the Financial markets. Without any central authority issuing the currency, the Bitcoin has been associated with controversy ever since its popularity, accompanied by increased public interest, reached high levels. Here, we contribute to the discussion by examining the potential drivers of Bitcoin prices, ranging from fundamental sources to speculative and technical ones, and we further study the potential influence of the Chinese market. The evolution of relationships is examined in both time and frequency domains utilizing the continuous wavelets framework, so that we not only comment on the development of the interconnections in time but also distinguish between short-term and long-term connections. We find that the Bitcoin forms a unique asset possessing properties of both a standard financial asset and a speculative one.
611 citations
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TL;DR: In this paper, the authors present a partial equilibrium model of the determination of domestic and export prices by a monopolistic competitive firm, which stresses the role of exchange rate uncertainty and expectations.
588 citations