Topic
Foreign exchange market
About: Foreign exchange market is a research topic. Over the lifetime, 6661 publications have been published within this topic receiving 153384 citations. The topic is also known as: forex & FX.
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TL;DR: In this article, a quantitative assessment of the role of different assumptions about the values of key trade elasticities is provided, supporting the structuralist view that it is not sufficient to look at problems of adjustment only at the macroeconomic level.
Abstract: An acute shortage of foreign exchange has been a recurring problem for many developing economies. This paper reexamines the foreign exchange gap issue and the debate between structuralists and neoclassicists by providing a quantitative assessment of the role of different assumptions about the values of key trade elasticities. It also seeks to complement the existing descriptive analysis of the consequences of alternative adjustment mechanisms with a quantitative analysis that indicates the relative importance of different behavioural assumptions and policy regimes. The empirical analysis is based on a computable general equilibrium model which is Walrasian in spirit and captures price mechanisms, market interactions, and structural interdependence in a non-linear multisector framework. The analysis lends support to the structuralist view that it is not sufficient to look at problems of adjustment only at the macroeconomic level.
82 citations
Posted Content•
11 Dec 2016
TL;DR: The authors found that the financial channel partly offsets the trade channel for emerging market economies, but the effect is weaker for advanced economies, and they used trade-weighted exchange rates and new BIS-constructed debt weighted exchange rates to separate these influences.
Abstract: While the trade channel indicates that an exchange rate depreciation will stimulate domestic economic activity, the financial channel can have the opposite effect. When banks and non-banks have foreign currency liabilities, an exchange rate depreciation has valuation effects that can lead to a tightening in domestic financial conditions. Using trade-weighted exchange rates and new BIS-constructed debt-weighted exchange rates to separate these influences, this article finds that the financial channel partly offsets the trade channel for emerging market economies but the effect is weaker for advanced economies.
82 citations
TL;DR: In this paper, the existence of Granger-causal orderings among cointegrated series is shown to imply that asset prices determined in a weakly efficient market cannot be co-integrated.
81 citations
Posted Content•
TL;DR: This article reviewed the empirical literature about sovereign debt and default, including the work of economists, historians, and political scientists, and also emphasized parallel developments by theorists and recommend steps to improve the correspondence between theory and data.
Abstract: In this essay we review the empirical literature about sovereign debt and default. As we survey the work of economists, historians, and political scientists, we also emphasize parallel developments by theorists and recommend steps to improve the correspondence between theory and data.
81 citations
Posted Content•
81 citations