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.

Locational determinants of foreign direct investment in an emerging market economy: evidence from turkey

Abstract: Over the past two decades, Turkey has recorded a substantial increase in the level of annual foreign direct investment (FDI) inflows. Building on the prior literature, this paper provides an empirical analysis of location-related determinants of FDI. This is undertaken by means of a cointegration analysis of major locational factors impacting upon the level of FDI inflows for the period 1980-1998. The evidence from this study supports the contention that while Turkey offers several location advantages to foreign investors in terms of market size, infrastructure, openness of the economy and market attractiveness, the lack of exchange rate and economic stability has hindered its efforts to harbor much higher volume of FDI.

Optimal Foreign Exchange Market Intervention

Abstract: The problem of optimal exchange intervention is approached using the techniques derived in the "targets, instruments, and indicators" literature. The optimal exchange-rate policy is one of permitting the appropriate degree of exchange-rate flexibility rather than one of complete fixity or complete flexibility of the exchange rate. Although the problem of the optimal exchange-rate regime has been analyzed in these terms before, criteria previously employed, emphasizing the geographical or functional location of disturbances, are seen to be inappropriate for a portfolio balance model with some degree of capital mobility.

Have national business cycles become more synchronized

Abstract: In this paper, we document evidence on the synchronization of business cycles across 16 countries over the past century and a quarter, demarcated into four exchange rate regimes. We find using three different methodologies that there is a secular trend towards increased synchronization for much of the twentieth century and that it occurs across diverse exchange rate regimes. This finding is in marked contrast to much of the recent literature, which has focused primarily on the evidence for the past 20 or 30 years and which has produced mixed results. We then considered a number of possible explanations for the observed pattern of increased synchronization. We first ascertained the role of shocks demarcated into country-specific (idiosyncratic) and global (common). Our key finding here is that global (common) shocks are the dominant influence across all regimes. The increasing importance of global shocks we posit reflects the forces of globalization, especially the integration of goods and services through international trade and the integration of financial markets. Our evidence shows a modest role for increasing bilateral trade in explaining synchronization, with stronger evidence for regional integration in Europe and North America but the evidence for the role of financial integration proxied by the removal of capital controls is inconclusive.