Cross-border production sharing and exchange-rate sensitivity of Mexico's trade balance

2013 ◽  
Vol 22 (2) ◽  
pp. 281-297 ◽  
Author(s):  
Amit Ghosh
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Rate Sensitivity ◽  
Cross Border ◽  
Production Sharing

scholarly journals Toward the Modeling of Russia's Monetary System

2021 ◽  
Author(s):  
S.M. Borodachev
Keyword(s):  
Exchange Rate ◽  
Commercial Banks ◽  
Trade Balance ◽  
Foreign Currency ◽  
Economic Conditions ◽  
Currency Reserve ◽  
Cross Border ◽  
Monetary System ◽  
Money Flows ◽  
The Creation

The paper explains the dynamics of monetary aggregates in Russia with the help of country's trade balance, the creation of deposits by commercial banks and cross-border flows of rubles and (foreign) currency. The volumes of deposits and flows, in turn, depend on changes the currency/ruble exchange rate and favorable external economic conditions. The model was estimated by the Kalman filter, the adequacy was confirmed by stimulation. Monthly money supply forecasts have an accuracy of ~ 1%. It was found that the volume of additional deposits created per month is ~ 300 billion RUB (this leads to real inflation of 9.5% per annum), money flows that are not related to payments for goods: rubles inflow from abroad ~ 100 billion RUB, currency goes abroad ~ $ 15 billion. With the growth / fall of the dollar exchange rate by 1 RUB per month, during the same month, the creation of additional ruble deposits and the arrival of rubles from outside decreases / increases by $ 0.114 billion. The increase of the Currency Reserve Assets of Russia is accompanied by going abroad ~ 5% of the increase.

PRODUCTION NETWORKS AND THE OPEN MACROECONOMY

2008 ◽  
Vol 53 (03) ◽  
pp. 509-521 ◽  
Author(s):  
SVEN W. ARNDT
Keyword(s):  
Exchange Rate ◽  
Balance Of Payments ◽  
Policy Implications ◽  
Monetary Integration ◽  
Trade Integration ◽  
Production Networks ◽  
Cross Border ◽  
Production Sharing ◽  
Rapid Spread ◽  
Rate Behavior

A key feature of globalization in the current era has been the rapid spread of cross-border production sharing in many regions of the world, including Europe, North America and Asia. The effects of these developments in the context of regional trade integration have been examined in the recent literature. This paper looks at their implications for regional monetary integration and exchange-rate policies. Cross-border production networks and the intra-industry trade associated with them affect exchange-rate behavior, balance of payments adjustment, and the transmission of shocks and disturbances. This paper examines the policy implications of regional production networks that (i) are confined to the countries of a given region, and (ii) involve a dominant extra-regional economy.

The Impossible Trinity» rule in the context of international experience

2019 ◽  
pp. 90-96
Author(s):  
M.P. Tskhovrebov ◽  
A.S. Tanasova
Keyword(s):  
Exchange Rate ◽  
Inflation Targeting ◽  
Empirical Studies ◽  
Theoretical Development ◽  
External Shocks ◽  
Cross Border ◽  
Relevant Today ◽  
Russian Economy ◽  
Monetary Authorities ◽  
Increased Sensitivity

The article is devoted to the «Trilemma» of the policy of the monetary authorities, or the «rule of impossible trinity». This policy compatibility rule, formulated more than 50 years ago, remains relevant today. Its reliability is generally confirmed by a number of empirical studies, although there are also suggestions on the need to adjust this economic and theoretical development. The corresponding discussion also affects the policy of the Bank of Russia (mega-regulator), which carries out inflation targeting in conditions of the free movement of cross-border capital and the use of a floating ruble exchange rate. Regarding the effectiveness of this policy, carried out in the presence of increased sensitivity of the Russian economy to external shocks, the authors express certain doubts.

scholarly journals Currency Depreciation, Trade Balance and Intra-Industry Trade Interactions in Turkey’s OECD Trade

2016 ◽  
Vol 8 (4) ◽  
pp. 8 ◽  
Author(s):  
Mehmet Demiral
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Real Effective Exchange Rate ◽  
Series Data ◽  
Adjustment Process ◽  
Industry Trade ◽  
Long Run ◽  
Effective Exchange ◽  
Short Run ◽  
Effective Exchange Rate

<p>This study re-examines the determinants of Turkey’s trade balance in its manufactures trade with 33 OECD-member countries for the short-run and the long-run. Unlike other studies, in the relationships we also control the moderating effects of the availability of import substitutes proxied by intra-industry trade. We analyze quarterly aggregated time-series data of the period spanning from 1998.QI to 2015.QIII, following the autoregressive distributed lag (ARDL) bounds testing approach to the cointegration and the error correction modeling. Estimation results reveal that real effective exchange rate, together with domestic and foreign incomes are still among the core determinants of Turkey’s trade balance in the manufacturing sectors. There is no significant impact of domestic final oil prices that also include all the taxes on gasoline. The trade balance depends on domestic income negatively and the aggregated income of the OECD countries positively. The finding that real depreciation of Turkish lira against to those of Turkey’s OECD trade partners improves trade balance in both the short-run and the long-run, indicates no evidence of J-curve adjustment process. Unsurprisingly, the intra-industry trade seems to be an important factor that moderates the elasticities of trade balance to its determinants, especially to real effective exchange rate and domestic income. Overall results underline the importance of import-substitution capability besides the export-oriented production to ease the longstanding large trade deficits for Turkey.</p><strong></strong>

The Effect of Real Exchange Rate on Trade Balance in a Resource-Rich Economy: The Case of Mongolia

2018 ◽  
Vol 53 (4) ◽  
pp. 211-224 ◽  
Author(s):  
Gan-Ochir Doojav
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
Developing Economies ◽  
Jel Classification ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Exchange Rate Depreciation

For resource-rich developing economies, the effect of real exchange rate depreciation on trade balance may differ from the standard findings depending on country specific characteristics. This article employs vector error correction model to examine the effect of real exchange rate on trade balance in Mongolia, a resource-rich developing country. Empirical results show that exchange rate depreciation improves trade balance in both short and long run. In particular, the well-known Marshall–Lerner condition holds in the long run; however, there is no evidence of the classic J-curve effects in the short run. The results suggest that the exchange rate flexibility may help to deal effectively with current account deficits and exchange rate risk. JEL Classification: C32, C51, F14, F32

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