Topic
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.
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TL;DR: The authors investigated the long-run relationship between real oil prices and real exchange rates by using a monthly panel of G7 countries from 1972:1 to 2005:10 and found that real oil price may have been the dominant source of real exchange rate movements.
549 citations
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TL;DR: In this paper, the authors suggest that a model based on financial stability and financial openness goes far toward explaining reserve holdings in the modern era of globalized capital markets and suggest that the size of domestic financial liabilities that could potentially be converted into foreign currency (M2), financial openness, the ability to access foreign currency through debt markets, and exchange rate policy are all significant predictors of reserve stocks.
Abstract: The rapid growth of international reserves, a development concentrated in the emerging markets, remains a puzzle. In this paper, we suggest that a model based on financial stability and financial openness goes far toward explaining reserve holdings in the modern era of globalized capital markets. The size of domestic financial liabilities that could potentially be converted into foreign currency (M2), financial openness, the ability to access foreign currency through debt markets, and exchange rate policy are all significant predictors of reserve stocks. Our empirical financial-stability model seems to outperform both traditional models and recent explanations based on external short-term debt.
547 citations
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TL;DR: In this paper, the impact of workers' remittances on the real exchange rate using a panel of 13 Latin American and Caribbean countries was analyzed and it was shown that remittance has the potential to inflict economic costs on the export sector of receiving countries by reducing its international competitiveness.
543 citations
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Abstract: We propose that analysis of purchasing power parity (PPP) and the law of one price should explicitly take into account the possibility of “commodity points”—thresholds delineating a region of no central tendency among relative prices, possibly due to lack of perfect arbitrage in the presence of transaction costs and uncertainty. More than 80 years ago, Heckscher stressed the importance of such incomplete arbitrage in the empirical application of PPP. We devise an econometric method to identify commodity points. Price adjustment is treated as a nonlinear process, and a threshold autoregression offers a parsimonious specification within which both thresholds and adjustment speeds are estimated by maximum likelihood methods. Our model performs well using post-1980 data, and yields parameter estimates that appear quite reasonable: adjustment outside the thresholds might imply half-lives of price deviations measured in months rather than years, and the thresholds correspond to popular rough estimates as to the order of magnitude of actual transport costs. The estimated commodity points appear to be positively related to objective measures of market segmentation, notably nominal exchange rate volatility.J. Japan Int. Econ.December 1997,11(4), pp. 441–479. Department of Economics, University of California, Berkeley, California 94720-3880; and Department of Economics, Northwestern University, Evanston, Illinois 60208-2600.
538 citations
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TL;DR: In this article, the authors measure the proportion of U.S. exchange rate movements that can be accounted for by movements in relative prices of non-traded goods, and find that the majority of these movements can be explained by price changes.
Abstract: This study measures the proportion of U.S. exchange rate movements that can be accounted for by movements in relative prices of non-traded goods.
532 citations