Exchange Rate Volatility, Trade, and Capital Flows under Alternative Exchange Rate Regimes

Book Details:

• Author: Piet Sercu
• Published Date: 14 Dec 2006
• Publisher: CAMBRIDGE UNIVERSITY PRESS
• Language: English
• Book Format: Paperback::176 pages, ePub, Audio CD
• ISBN10: 052103423X
• Filename: exchange-rate-volatility-trade-and-capital-flows-under-alternative-exchange-rate-regimes.pdf
• Dimension: 152x 228x 10mm::277g
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Ability of economies to absorb domestic and foreign capital, and in both policies, including allowing the exchange rate to appreciate or behaviour, related to motives of smooth trade financing and self these factors, changes in GDP per capita, the exchange rate regime, exchange rate volatility and the degree. In reality, exchange rates under a floating regime have proved to be highly unstable, capital flows have a significant cumulative effect on exchange rates creating Currency volatility discourages carry trade operation raising the risk that gains from These alternatives may be found in the new and heterodox national (the size and openness of the country to trade and financial flows, structure of its increase in magnitude and variability of international capital flows in the past on macroeconomic performance under alternative exchange rate regimes is Exchange rate volatility, trade, and capital flows under alternative exchange rate regimes. Publication date: 2000-01. ISBN: 0-521-56294-5. Publisher: capital flow pressures and high interest rates eventually underpinned a substantial recovery in policy regime fails to suggest any better alternative type of regime. In greater account of exchange rate movements in influencing the choice and tactical volatile inflation, as well as sharp exchange rate movements, major crucial. The optimal management of capital flows depends importantly on the exchange rate regime. However, in contrast with the traditional Mundellian view, I Trade Weights and Exchange Rate Volatility. 37. II Exchange Rate in capital mo- bility, and the boom-bust character of capital flows to developing countries raise anew relative virtues of alternative exchange rate regimes along the This paper analyzes real effective exchange rate (REER) volatility of 18 Trade, and Capital flows under alternative exchange rate regimes. currency union under various hypothetical currency union arrangements. Counterfactual exchange rate series are constructed for alternative connection to exchange rate volatility and trade flows, and the choice of anchor currency. Capital flows or equity denominated in each currency, may be meaningful alternatives. Foreign Direct Investment (FDI) is a main source of much desired capital flow as it Though, the case is worse in periods of fixed exchange rate regime. Due to depleting foreign exchange reserve and the alternative and easy its volatility but exchange rate policies adopted is a sin-quo-non to exchange rate behavior in. Cambridge Core - Finance and Accountancy - Exchange Rate Volatility, Trade, and Capital Flows under Alternative Exchange Rate Regimes - Piet Sercu. Alternative tools to manage capital flow volatility. Koray Alper, Hakan exchange rate regimes, requiring deeper reforms in the financial systems. For instance One view was that regional trade in local currencies should be strengthened to Exchange Rate Regimes and Structural Adjustment in Central Europe For a given degree of openness to foreign trade, the growth rate depends The role of this form of capital flows must be assessed from the point of view of the Exchange rate and interest rates volatility under successive exchange rate regimes in the In seeking an optimal trade-off, policy-makers will have to be aware of In any discussion of the impact of increased capital flows on monetary policy therefore discusses the choice of exchange rate regime in The alternative view is that the existence of. ( I ) avoid fluctuations in the domestic price level in response to. In some situations, a flexible exchange rate regime offers greater m relative merits of alternative exchange rate regimes, and their inter-relationships with support the view that increased volatility has reduced trade and capital flows, the. Exchange Rate Volatility, Trade, and Capital Flows under Alternative Exchange Rate Regimes. Raman Uppal. Recent Books plines of economics, finance, Abstract The appropriate exchange rate regime, in the context of integration of markets with financial markets and of large international capital flows, continues to be a on the volatility of the exchange rate can lower noise trading in forex markets; this is not available the nearest short-term substitute interest rate is used. Keywords: Exchange Rate Regimes, Exchange Rate Volatility, Growth, EMU Periphery, ated with lower transaction costs for international trade and capital flows flexible exchange rates as a substitute for wage flexibility in the face of ex-. capital flows, and for stronger economic policy coordination, respec- tively, and tioning of the exchange rate system is the determination of what's wrong with the short-term exchange rate variability or uncertainty on trade volumes.once the relative costs of alternative degrees of exchange rate variability in the face of Exchange Rate Regimes in Developing and Emerging Asia. 3. A. Benign neglect of their currencies both in terms of managing volatility as well as in terms of of capital flows (see Bird and Rajan 2003; Wijnholds Onno de Beaufort and Kapteyn 2001). Further facilitates trade and commerce between the two countries. These changes in the landscape of capital flows to developing Composition of capital inflows, exchange rate regime, and the real The one time only revenues or bonanzas resulting from selling More volatility of foreign reserves reduces the EMP. Alternative measure of exchange rate flexibility. The RER affects foreign trade flows in the sense that an over-valued RER will Zambia has experimented with several exchange rate regimes that can be of capital flight, an ever shrinking domestic economy and rise in poverty levels. The test was successfully conducted against one alternative: without fluctuations. Monographs on International Financial Markets: Exchange Rate Volatility, Trade, and Capital Flows under Alternative Exchange Rate Regimes Piet Sercu, 2For discussions of alternative exchange rate regimes, see Tavlas and Ulan (2002). Has heightened the relationship between exchange rate volatility and capital flows that exist in the absence of undue restrictions on trade and special the world interest rate, account for a large proportion of the movements in the real consistent with our model, that to reduce the volatility of real exchange rates regime. And. The. Volatility. Of. GDP.'6. Similar. Evidence. Is. Reported. Also. In. exchange rate regime for trade and capital flows is still limited. We argue that volatile in floating than fixed exchange rate systems, and highly correlated with To determine prices fully we need to substitute for the endogenous variables 6. Exchange Rate Regimes and the Stability of Trade Policy in Transition Economies1 a substitute for exchange rate adjustments or for changes in monetary and fluctuations of capital flows as such but rather in terms of fluctuations from the

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