Exchange rate

About: Exchange rate is a research topic. Over the lifetime, 47255 publications have been published within this topic receiving 944563 citations. The topic is also known as: foreign-exchange rate & forex rate.

European Exchange Rate Credibility Before the Fall

Abstract: Realignment expectations which measure exchange rate credibility are analyzed for European exchange rates, using daily financial data since the inception of the EMS. It is difficult to find economically meaningful relationships between realignment expectations and macroeconomic variables, although there are signs that lower inflation improves credibility. Statistically, many movements to realignment expectations are common to ERM participants. There were few indications of poor ERM credibility before late August 1992; the dimensions of the currency crisis of September 1992 appear to have taken both policy-makers and private agents largely by surprise.

Exchange Rate Pass-Through in U.S. Manufacturing Industries

Abstract: This paper studies exchange rate pass-through in U.S. manufacturing industries and its cross-sectional variation. Through an adapted Dixit–Stiglitz model of product differentiation, the paper predicts that pass-through is positively related to the degree of product differentiation and inversely related to the elasticity of marginal cost with respect to output. Empirical estimates of the pass-through elasticities show that pass-through is incomplete and varies across industries. The degree of pass-through is found to be positively correlated to different proxies for product differentiation, and negatively to a proxy for the elasticity of marginal cost.

Implications of the Globalization of the Banking Sector: The Latin American Experience

Abstract: Foreign entry into domestic banking markets remains a contentious issue. Whether privatizing a state bank in Brazil or selling a failed bank in Japan, the proposed sale of a large domestic financial institution, possibly to a foreign acquirer, frequently results in a major controversy. Many Asian countries have yet to experience major foreign penetration of domestic banking markets, while Latin American countries have privatized many of their banks and have encouraged foreign banks to enter their domestic markets. ; Because many Latin American countries opened their markets during the 1990s, and because they have experienced exchange rate and banking crises as well as severe fluctuations in their macroeconomies over this period, Latin American countries provide a good laboratory for understanding the effects of foreign bank penetration. The authors examine the legal and economic conditions that have affected foreign bank penetration in Argentina, Brazil, and Mexico and review how foreign banks have reacted to recent crises affecting these countries. They find that foreign banks viewed the economic problems as providing opportunities to expand, either by acquisition or by internal growth of existing subsidiaries. The same was not true for offshore lending, however.

Purchasing Power Parity in the Long Run: A Test of the Dollar/Pound Exchange Rate (1890-1978)

Abstract: This paper tests the Purchasing Power Parity (PPP) hypothesis by analyzing t he long-run tendency of the dollar/pound exchange rate using data sin ce 1890. Two different models are considered: (1) a na ive model and (2) a modified monetary model. The conditions of propor tionality and symmetry cannot be rejected when using the naive model. The final results using the monetary model, however, indicate that t he existence of permanent deviations from PPP cannot be ruled out. Copyright 1987 by Ohio State University Press.