Have budget deficits and money growth caused changes in interest rates and exchange rates in Canada?

1991 ◽  
Vol 2 (1) ◽  
pp. 69-82 ◽  
Author(s):  
Ali F. Darrat ◽  
M.O. Suliman
Keyword(s):  
Exchange Rates ◽  
Interest Rates ◽  
Money Growth ◽  
Budget Deficits

scholarly journals European Monetary Union: a cointegration analysis

2021 ◽  
Author(s):  
Alfred A Haug ◽  
Leo Michelis
Keyword(s):  
European Union ◽  
Exchange Rates ◽  
Interest Rates ◽  
Monetary Union ◽  
Real Exchange Rates ◽  
Cointegration Analysis ◽  
Budget Deficits ◽  
The European Union ◽  
Convergence Criteria ◽  
European Union Countries

This paper employs systems-based cointegration techniques developed by [Reference to Johansen] and [Reference to Johansen] to determine which European Union countries would form a successful Economic and Monetary Union (EMU), based on long-run behavior of the nominal convergence criteria laid down in the Maastricht treaty. The original 12 European Union countries are analyzed together. Nominal exchange rates, real exchange rates, long-term interest rates, and government budget deficits are each analyzed for co-movements among the 12 countries and various subgroups of them. The results suggest that not all of the 12 original countries of the European Union can form a successful EMU over time, unless several countries make significant adjustments.

scholarly journals Budget deficits, money growth and inflation: empirical evidence from Vietnam

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hoang Van Khieu
Keyword(s):  
Interest Rates ◽  
Empirical Evidence ◽  
Money Growth ◽  
Budget Deficits ◽  
Monetary Policies ◽  
Content Type ◽  
High Inflation ◽  
Endogenous Variables ◽  
The Interest Rate ◽  
Positive Shock

PurposeThis paper aims to uncover the nexus between budget deficits, money growth and inflation in Vietnam in the period 1995–2012.Design/methodology/approachThe paper uses a structural vector auto-regressive model of five endogenous variables including inflation, real GDP growth, budget deficit growth, money growth and the interest rate.FindingsIt is found that inflation rose in response to positive shocks to money growth and that budget deficits had no significant impact on money growth and therefore inflation. This empirical evidence supports the hypothesis that fiscal and monetary policies were relatively independent. Money growth significantly decreased in response to a positive shock to inflation; interest rates had no significant effect on inflation but considerably increased in response to positive inflation shocks. This implies that the monetary base was more effective than interest rates in fighting inflation.Originality/valueThis paper sheds light into understanding the link between budget deficits, money growth and inflation in Vietnam during the high-inflation period 1995–2012. The finding supports the hypothesis that fiscal and monetary policies were relatively independent over the period.

scholarly journals European Monetary Union: a cointegration analysis

2021 ◽  
Author(s):  
Alfred A Haug ◽  
Leo Michelis
Keyword(s):  
European Union ◽  
Exchange Rates ◽  
Interest Rates ◽  
Monetary Union ◽  
Real Exchange Rates ◽  
Cointegration Analysis ◽  
Budget Deficits ◽  
The European Union ◽  
Convergence Criteria ◽  
European Union Countries

This paper employs systems-based cointegration techniques developed by [Reference to Johansen] and [Reference to Johansen] to determine which European Union countries would form a successful Economic and Monetary Union (EMU), based on long-run behavior of the nominal convergence criteria laid down in the Maastricht treaty. The original 12 European Union countries are analyzed together. Nominal exchange rates, real exchange rates, long-term interest rates, and government budget deficits are each analyzed for co-movements among the 12 countries and various subgroups of them. The results suggest that not all of the 12 original countries of the European Union can form a successful EMU over time, unless several countries make significant adjustments.

Current account balances in Central America 1974–1984: external and domestic influences

1987 ◽  
Vol 19 (1) ◽  
pp. 87-111 ◽  
Author(s):  
William Loehr
Keyword(s):  
Exchange Rates ◽  
Interest Rates ◽  
Current Account ◽  
Real Exchange Rates ◽  
Developed Countries ◽  
Central American ◽  
Budget Deficits ◽  
External Variables ◽  
The Developed Countries ◽  
Current Account Balances

SummaryThis paper examines the sensitivity of current account balances to several important variables. Variables are classified as external and domestic. External variables are those over which Central American countries have little or no control. In this study external variables are real interest rates in world capital markets, the terms of trade, and growth in the developed countries. Low real interest rates, improved terms of trade and rapid growth in the developed countries would be expected to improve current account balances. Domestic variables include budget deficits and real exchange rates. These are factors over which Central American countries do have control. Budget deficits and appreciations of real exchange rates can be expected to cause deteriorations in current account balances.

Conclusions

2018 ◽  
Author(s):  
Stephany Griffith-Jones ◽  
José Antonio Ocampo ◽  
Paola Arias
Keyword(s):  
Developing Countries ◽  
Renewable Energy ◽  
Exchange Rates ◽  
Interest Rates ◽  
Development Strategy ◽  
National Development ◽  
Financial Inclusion ◽  
Production Sector ◽  
New Instruments ◽  
Innovation And Entrepreneurship

Based on the seven case studies analysed in this volume, this chapter concludes that national development banks (NDBs) have been successful in many cases in supporting innovation and entrepreneurship, key new sectors like renewable energy, and financial inclusion. They have developed new instruments, such as far greater use of guarantees, equity (including venture capital) and debt funds, and new instruments for financial inclusion. The context in which they operate is key to their success. Active countercyclical policies, low inflation, fairly low real interest rates, a well-functioning financial sector, and competitive exchange rates are crucial. They are also more effective if the country has a clear development strategy, linked to production sector strategies that foster innovative sectors. Under these conditions, the chapter argues that there is great need for a larger scale of NDB activity in Latin America and in developing countries in general.

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