Margins of imports, forward-looking firms, and exchange rate movements

2018 ◽  
Vol 81 ◽  
pp. 185-202
Author(s):  
Haichao Fan ◽  
Yao Amber Li ◽  
Chen Carol Zhao
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Movements ◽  
Forward Looking

scholarly journals Exchange Rates and Monetary Fundamentals: What Do We Learn from Linear and Nonlinear Regressions?

2014 ◽  
Vol 2014 ◽  
pp. 1-14 ◽  
Author(s):  
Guangfeng Zhang
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Correction Model ◽  
Exchange Rate Dynamics ◽  
Long Run ◽  
Exchange Rate Movements ◽  
Short Run ◽  
Us Dollar ◽  
Linear And Nonlinear ◽  
Japanese Yen

This paper revisits the association between exchange rates and monetary fundamentals with the focus on both linear and nonlinear approaches. With the monthly data of Euro/US dollar and Japanese yen/US dollar, our linear analysis demonstrates the monetary model is a long-run description of exchange rate movements, and our nonlinear modelling suggests the error correction model describes the short-run adjustment of deviations of exchange rates, and monetary fundamentals are capable of explaining exchange rate dynamics under an unrestricted framework.

scholarly journals Exchange Rate, Uncertainty and Foreign Direct Investment Inflow in West African Monetary Zone

2018 ◽  
Vol 20 (1) ◽  
pp. 1-12 ◽  
Author(s):  
Perekunah B. Eregha
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Direct Investment ◽  
Exchange Rate Volatility ◽  
Commodity Prices ◽  
Fixed Effect Model ◽  
West African ◽  
Effect Model ◽  
Exchange Rate Movements ◽  
Global Shocks

Exchange-rate movements are mostly unpredictable, and this tends to affect both trade and foreign investment flows. This is because foreign investors are unclear on the returns to investment decisions in such cases. Hence, this study examines the effect of exchange rate, its volatility and uncertainty on foreign direct investment (FDI) inflow in West African monetary zone (WAMZ). The study covers the period1980–2014, and the within estimator for the fixed effect model is employed. The study accounts for both exchange rate volatility and uncertainty measures which are anticipated and unanticipated exchange rate innovations measures, respectively. The results show that exchange-rate movements in WAMZ countries are more of unanticipated than anticipated innovations in affecting FDI inflow. Therefore, policies aimed at targeting exchange-rate stability are essential in the WAMZ countries since investors are profit maximizers; hence, investment uncertainties must be kept as low as possible. Also since WAMZ export sectors are primary products based, policies should be geared towards the diversification of the export sectors to combat unanticipated global shocks from commodity prices movement in having an effect on the exchange rate through the foreign exchange reserve channel.

scholarly journals Japan’s Foreign Assets and Liabilities

2021 ◽  
Vol 21 (26) ◽  
Author(s):  
Mariana Colacelli ◽  
Deepali Gautam ◽  
Cyril Rebillard
Keyword(s):  
Exchange Rate ◽  
Current Account ◽  
Current Account Balance ◽  
Panel Estimation ◽  
Exchange Rate Fluctuations ◽  
Exchange Rate Movements ◽  
Trade Channel ◽  
Net Foreign Asset ◽  
High Yields ◽  
Corporate Saving

The composition of Japan’s current account balance has changed over time, with an increasing income balance primarily reflecting a growing net foreign asset position and higher corporate saving. A comparison of Japan’s income balance with peer countries highlights: (i) relatively high yields on FDI assets, and (ii) very low FDI liabilities in Japan. Panel estimation is used to derive separate exchange rate elasticities for income credit and debit, with novel accounting that disentangles the mechanical from the economic response to exchange rate fluctuations. Despite the changing composition of Japan’s current account balance, its response to exchange rate movements still operates mostly through the traditional trade channel, with a small but reinforcing contribution from the income balance.

scholarly journals EFEK KETERBUKAAN PERDAGANGAN PADA VOLATILITAS NILAI TUKAR

2019 ◽  
Vol 10 (1) ◽  
pp. 38-45
Author(s):  
Wayrohi Meilvidiri ◽  
Syahruddin Syahruddin ◽  
Romualdus Turu Putra Maro Djanggo
Keyword(s):  
Exchange Rate ◽  
Money Supply ◽  
Trade Openness ◽  
Exchange Rate Volatility ◽  
Normality Test ◽  
Lm Test ◽  
Exchange Rate Movements ◽  
Negative Effect ◽  
The Exchange Rate ◽  
The Impact

This study uses the q to q dataset for the period 2011-2018, to examine the effect of trade openness on the exchange rate, on the other hand variable money supply, inflation and GDP growth and high-low exchange rates (dummy) will smooth the impact of shocks to the exchange rate . Using the OLS econometric estimator to see the effect of variables and the ARCH method to measure the uncertainty of exchange rate movements. Estimation results show that trade openness (open trade index); the money supply (money supply) and the high-low peak value of the exchange rate have a significant positive effect while the growth variable has a significant negative effect on exchange rate volatility. The LM test simultaneously found ARCH in residual data in lag 1 and lag 2. The normality test found abnormal residuals, while the residual heteroscedasticity test showed no ARCH problems in the last residuals.

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