Temporary Terms Of Trade Disturbances The Real Exchange Rate And The Current Account
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Author | : Sebastian Edwards |
Publisher | : |
Total Pages | : |
Release | : 1990 |
Genre | : |
ISBN | : |
Download Temporary Terms of Trade Disturbances, The Real Exchange Rate and the Current Account Book in PDF, Epub and Kindle
In this paper a general equilibrium intertemporal model with optimizing consumers and producers is developed to analyze how the temporary term's of trade disturbances affect the path of real exchange rates and the current account. Changes in the internal terms of trade (due to tariff changes) and to the external terms of trade are considered. The model is completely real, and considers a small open economy that produces and consumes three goods each period. It is shown that, without imposing rigidities or adjustment costs, interesting paths for the equilibrium real exchange rate can be generated. In particular "equilibrium overshooting" can be observed. Precise conditions under which a temporary import tariff will worsen the current account in period 1 are derived. The way in which temporary and permanent external terms of trade shocks will affect the current account are analyzed. Several ways in which the model can be extended are discussed The results obtained from this model have important implications for the design of balance of payments policy and for the analysis of real exchange rate misalignment and overvaluation
Author | : |
Publisher | : |
Total Pages | : |
Release | : 1988 |
Genre | : |
ISBN | : |
Download Temporary Terms of Trade Disturbances, the Real Exchange Rate, and the Current Account Book in PDF, Epub and Kindle
Author | : International Monetary Fund |
Publisher | : International Monetary Fund |
Total Pages | : 32 |
Release | : 1989-03-14 |
Genre | : Business & Economics |
ISBN | : 1451921411 |
Download Terms of Trade Disturbances, Real Exchange Rates, and Welfare Book in PDF, Epub and Kindle
Many arguments that have been advanced in favor of maintaining capital controls within the EC have not paid sufficient attention to the welfare consequences of this type of market intervention. Our paper provides a simple, optimizing framework in which the welfare consequences of capital controls can be assessed. Two main issues are considered. First, how do capital controls affect the adjustment of macroeconomic variables to real disturbances? Second, what is the nature of second best arguments for maintaining capital controls given that certain distortions will remain after the European single market is in place in 1992?
Author | : Sebastian Edwards |
Publisher | : |
Total Pages | : 60 |
Release | : 1987 |
Genre | : Commerce |
ISBN | : |
Download Tariffs, Terms of Trade, and the Real Exchange Rate in an Intertemporal Optimizing Model of the Current Account Book in PDF, Epub and Kindle
In this paper a minimal general equilibrium intertemporal model, with optimizing consumers and producers, is developed to analyze the process of real exchange rate determination. The model is completely real, and considers a small open economy that produces and consumes three goods each period. The model is also used to analyze the way in which the current account responds to several shocks. The working of the model is illustrated for the case of two disturbances: the imposition of import tariffs, and external terms of trade shocks. In the case of import tariffs, a distinction is made between temporary, anticipated, and permanent changes. It is shown that, without imposing rigidities or adjustment costs, interesting paths for the equilibrium real exchange rate can be generated. In particular "overshooting" and movements in opposite directions in periods one and two can be observed. Precise conditions under which temporary import tariffs will improve the current account are derived. Finally, several ways in which the model can be extended to take into account other issues such as changes in the fiscal deficit, and financial deregulation are discussed in detail.
Author | : Sebastian Edwards |
Publisher | : |
Total Pages | : 52 |
Release | : 1988 |
Genre | : Balance of trade |
ISBN | : |
Download Temporary Terms of Trade Disturbances, the Real Exchange Rate and the Current Account Book in PDF, Epub and Kindle
Author | : Klaus Schmidt-Hebbel |
Publisher | : World Bank Publications |
Total Pages | : 52 |
Release | : 1992 |
Genre | : Comercio internacional |
ISBN | : |
Download Dynamic Response to Foreign Transfers and Terms-of-trade Shocks in Open Economies Book in PDF, Epub and Kindle
Both permanent and transitory disturbances can change long- run capacity and output -- although they may have opposite effects on the current account. Liquidity constraints and wage rigidities tend to amplify the cyclical adjustment to external shocks.
Author | : Paul Cashin |
Publisher | : International Monetary Fund |
Total Pages | : 46 |
Release | : 1998-12 |
Genre | : Business & Economics |
ISBN | : |
Download Terms of Trade Shocks and the Current Account Book in PDF, Epub and Kindle
This paper examines the relationship between terms of trade shocks, private saving, and the current account position. The relationship between these variables is theoretically ambiguous: an adverse transitory terms of trade shock can either induce a deterioration or an improvement in the current account, depending on whether the resulting income effects are greater or less than the resulting substitution effects. The substitution effects involve both intertemporally substituting consumption and intratemporally substituting consumption between importables and nontradables. The relative strength of these substitution effects is estimated using data for five OECD countries during 1970/95; both are found to exert large and significant effects on the current account balance.
Author | : Michael Gavin |
Publisher | : |
Total Pages | : 28 |
Release | : 1988 |
Genre | : Foreign exchange |
ISBN | : |
Download Structural Adjustment to a Terms of Trade Disturbance Book in PDF, Epub and Kindle
Author | : Christian Miguel Broda |
Publisher | : |
Total Pages | : |
Release | : 2001 |
Genre | : Foreign exchange rates |
ISBN | : |
Download Terms of Trade and Exchange Rate Regimes in Developing Countries Book in PDF, Epub and Kindle
Author | : Leslie Lipschitz |
Publisher | : Cambridge University Press |
Total Pages | : 312 |
Release | : 2019-01-23 |
Genre | : Business & Economics |
ISBN | : 1108568467 |
Download Macroeconomics for Professionals Book in PDF, Epub and Kindle
Understanding macroeconomic developments and policies in the twenty-first century is daunting: policy-makers face the combined challenges of supporting economic activity and employment, keeping inflation low and risks of financial crises at bay, and navigating the ever-tighter linkages of globalization. Many professionals face demands to evaluate the implications of developments and policies for their business, financial, or public policy decisions. Macroeconomics for Professionals provides a concise, rigorous, yet intuitive framework for assessing a country's macroeconomic outlook and policies. Drawing on years of experience at the International Monetary Fund, Leslie Lipschitz and Susan Schadler have created an operating manual for professional applied economists and all those required to evaluate economic analysis.