China's Exchange Rate and Monetary Policies: Structural and Institutional Constraints and Reform Options

2008 ◽  
Vol 7 (3) ◽  
pp. 31-49 ◽  
Author(s):  
Geng Xiao
Keyword(s):  
Exchange Rate ◽  
The United States ◽  
Nominal Exchange Rate ◽  
Institutional Constraints ◽  
Institutional Barriers ◽  
Monetary Policies ◽  
Surplus Labor ◽  
Regulatory Systems ◽  
Advanced Economies ◽  
The One

This paper argues that declining transaction costs in exporting on the one hand and the structural and institutional barriers to importing and consumption on the other hand are the main causes for China's rising current account surplus. Reforms in China's planning, financial, and regulatory systems are more important than adjustment in nominal exchange rate for balancing China's trade and for China's surplus capital to hire more of its surplus labor. Although structural inflation and currency appreciation are necessary for China's price level to catch up step-by-step with those in the advanced economies, the pace of inflation and appreciation need to be compatible with China's underlying productivity growth. An “inflation first and appreciation second” approach would help China avoid the risks of both deflation and runaway inflation. The United States and China can have win–win results if both focus on the real constraints behind their external imbalances.

ONE APPROACH TO RESOLVE THE EXCHANGE RATE PUZZLE: RESULTS USING DATA FROM THE UNITED KINGDOM AND THE UNITED STATES

2018 ◽  
Vol 63 (05) ◽  
pp. 1367-1384
Author(s):  
MOHAMED ARIFF ◽  
ALIREZA ZAREI
Keyword(s):  
Exchange Rate ◽  
Interest Rates ◽  
The United States ◽  
Cash Flows ◽  
Nominal Exchange Rate ◽  
Data Series ◽  
Test Procedures ◽  
Bretton Woods ◽  
Long Run ◽  
Using Data

We approach a significant research topic in international economics by restating the test procedures in a novel manner consistent with monetary theorems with controls using monetary variables and applying an appropriate econometric methodology to re-examine three aspects of exchange rate behavior. (i) Does the inflation (price) factor affect Nominal Exchange Rate (NER)? (ii) Do relative interest rates between countries affect a country’s exchange rate? (iii) Do the price and interest rate effects hold if controls for non-parity factors are embedded in tests? The data series for this study are taken over 55 years covering pre-and-post-Bretton Woods era: a second test was done over the post-Bretton Woods period only using 30 years of data. Also, the traditional factors of parity conditions are extended in this research to take into account recently theorized and tested non-parity factors related to cash flows. The resulting evidence affirms clearly that both the parity factors (prices and interest rates) and the non-parity factors affect exchange rates significantly over the long run, also over the 30-year period. In our view, these findings extend our knowledge of how currency behavior is consistent with parity and non-parity theorems.

Financial Conditions Indexes and Monetary Policy in Asia

2017 ◽  
Vol 16 (2) ◽  
pp. 83-117 ◽  
Author(s):  
Margarita Debuque-Gonzales ◽  
Maria Socorro Gochoco-Bautista
Keyword(s):  
Monetary Policy ◽  
Common Factor ◽  
The United States ◽  
The Philippines ◽  
Output Growth ◽  
Monetary Transmission ◽  
Financial History ◽  
Monetary Policies ◽  
Financial Conditions ◽  
Advanced Economies

This paper constructs quarterly financial conditions indexes (FCIs) for eight Asian economies—namely, Hong Kong, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, and Thailand—using a common factor methodology based on Hatzius et al. ( 2010 ). A wide array of financial data is included in the indexes based on identified monetary transmission channels in the literature. Bank-related indicators, various measures of financial stress and risk, and credit surveys, where available, are incorporated to fully reflect the state of the financing environment. The FCIs for Asia successfully capture important episodes in each economy's financial history, but only the indexes of financially advanced economies Japan and Singapore have sufficient forecasting power to predict output growth and inflation. High co-movement of Asian FCIs suggests highly similar monetary policies in the region that are strongly linked with monetary policy in the United States.

scholarly journals The Renminbi Exchange Rate Reform and Its Implications for Asian Markets

2016 ◽  
Vol 02 (04) ◽  
pp. 485-506 ◽  
Author(s):  
Takamoto Suzuki
Keyword(s):  
United States ◽  
Exchange Rate ◽  
Emerging Economies ◽  
The United States ◽  
Economic Policies ◽  
Macroeconomic Policies ◽  
Monetary Policies ◽  
Special Drawing ◽  
The Stability ◽  
The U.S

Up until now, the Renminbi (RMB) reform has been progressing gradually. With the RMB becoming a Special Drawing Right (SDR) component currency, China’s monetary policies will exert significant influence on the international marketplace. The year 2014 witnessed the weakening of the RMB against the U.S. dollar, yet thanks to China’s prudent economic policies, the RMB stopped depreciating further and remained quite stable for the first half of 2015, which benefited not only China itself, but also the United States, Japan, and other Asian economies. Asian markets used to be strongly influenced by the U.S. monetary policy and the performance of the U.S. dollar. However, since the RMB devaluation against U.S. dollar in the summer of 2015, Asian markets have been inclined to move in accordance with the market information from China rather than that from the United States. Although the RMB is not a currency like the euro that has been adopted by a number of countries, it can still exert great impacts on emerging economies in the world. For the RMB to take hold globally, improved fundamentals in emerging economies, an easing in the influence of the RMB-USD exchange rate, and a healthy financial system in China are all necessary. Meanwhile, both China and the United States need to enhance their coordination on macroeconomic policies and guarantee the stability of RMB-USD exchange rate.

scholarly journals Price Setting in Online Markets: Basic Facts, International Comparisons, and Cross-Border Integration

2017 ◽  
Vol 107 (1) ◽  
pp. 249-282 ◽  
Author(s):  
Yuriy Gorodnichenko ◽  
Oleksandr Talavera
Keyword(s):  
Exchange Rate ◽  
International Comparisons ◽  
The United States ◽  
Nominal Exchange Rate ◽  
Retail Sector ◽  
Price Setting ◽  
Online Markets ◽  
Basic Facts ◽  
Exchange Rate Shocks ◽  
Pass Through

We document basic facts about prices in online markets in the United States and Canada, which is a rapidly growing segment of the retail sector. Relative to prices in regular stores, prices in online markets are more flexible and exhibit stronger pass-through (60–75 percent) and faster convergence (half-life less than two months) in response to movements of the nominal exchange rate. Multiple margins of adjustment are active in the process of responding to nominal exchange rate shocks. Properties of goods, sellers, and markets are systematically related to pass-through and the speed of price adjustment for international price differentials. (JEL F31, F41, L11, L81)

scholarly journals Versailles Redux? Eurozone Competitiveness in a Dynamic Balassa-Samuelson-Penn Framework

2014 ◽  
Vol 5 (2) ◽  
Author(s):  
Kevin Stahler ◽  
Arvind Subramanian
Keyword(s):  
Exchange Rate ◽  
International Comparison ◽  
Labor Cost ◽  
Prima Facie ◽  
Nominal Exchange Rate ◽  
Strongly Correlated ◽  
Unit Labor Cost ◽  
Advanced Economies ◽  
Exchange Rate Changes ◽  
Special Circumstances

AbstractPrima facie, competitiveness adjustments in the eurozone, based on unit labor cost developments, appear sensible and in line with what the economic analyst might have predicted and the economic doctor might have ordered. But a broader and arguably better – Balassa-Samuelson-Penn (BSP) – framework for analyzing these adjustments paints a very different picture. Taking advantage of the newly released PPP-based estimates of the International Comparison Program (2011), we identify a causal BSP relationship. We apply this framework to computing more appropriate measures of real competitiveness changes in Europe and other advanced economies in the aftermath of the recent global crises. There has been a deterioration, not improvement, in competitiveness in the periphery countries between 2007 and 2013. Second, the pattern of adjustment within the eurozone has been dramatically perverse, with Germany having improved competitiveness by 9% and with Greece’s having deteriorated by 9%. Third, real competitiveness changes are strongly correlated with nominal exchange rate changes, which suggests the importance of having a flexible (and preferably independent) currency for effecting external adjustments. Fourth, internal devaluation – defined as real competitiveness improvements in excess of nominal exchange rate changes – is possible but seems limited in scope and magnitude. Our results are robust to adjusting the BSP framework to take account of the special circumstances of countries experiencing unemployment. Even if we ignore the BSP effect, the broad pattern of limited and lopsided adjustment in the eurozone remains.

Central Banking in Turbulent Times

2018 ◽  
Author(s):  
Francesco Papadia ◽  
Tuomas Välimäki
Keyword(s):  
Central Bank ◽  
Great Recession ◽  
Financial Stability ◽  
The United States ◽  
Central Banking ◽  
Monetary Policies ◽  
The Great Recession ◽  
Advanced Economies ◽  
Essential Components ◽  
Turbulent Times

The book describes the long and difficult process that led to the central banking model prevailing in most advanced economies at the end of last century. The critical institutional basis of that model is an independent central bank with price stability as its dominant objective. The book, which looks in particular at the Federal Reserve of the United States (Fed) and at the European Central Bank (ECB), also presents the essential components of that model, while noting that financial stability did not fit well in it and was the neglected child of central banks before the Great Recession. The book then illustrates the hits that the Great Recession delivered to that model and asks whether a radical rethinking of the model is necessary. In particular, it examines whether the renewed importance of the financial stability objective, the blurred borders between fiscal and monetary policies, the moral hazard created by the central bank’s forceful actions, and, finally, the actions of the ECB to protect the euro have jeopardized the pre-crisis central bank model. The answer to this question is that, while it is not possible to simply return to the pre-crisis central bank model, the adaptations that are needed are more incremental than radical when considered in a long historical perspective. They nevertheless require changes in the statutes of both the Fed and the ECB, and thus will have to overcome a high institutional hurdle.

scholarly journals Panel Analysis of Monetary Model of ASEAN-5 Exchange Rates

2018 ◽  
Vol 11 (11) ◽  
pp. 1
Author(s):  
Noor Zainab Tunggal ◽  
Shariff Umar Shariff Abd. Kadir ◽  
Venus-Khim Sen Liew
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Exchange Rates ◽  
Money Supply ◽  
The United States ◽  
Real Income ◽  
Nominal Exchange Rate ◽  
Monetary Model ◽  
Nominal Exchange Rates ◽  
The Exchange Rate

In this study, we examined whether the exchange rates in ASEAN-5 countries are driven by monetary fundamentals. We applied the panel unit root tests and found that the United States denominated nominal exchange rates of Malaysian Ringgit, Indonesian Rupiah, Philippines Peso, Singapore Dollar, and Thailand Baht are all integrated of order one. Meanwhile, relative money supply and relative real income are also integrated in the same order. Nonetheless, the relative interest rate is integrated in order zero, and it implies the uncovered interest rate parity held in ASEAN-5. By using a panel cointegration test pioneered by Pedroni (2000, 2004), we found evidence that there is a long-run relationship between nominal exchange rate and its monetary fundamentals. Consistent with the monetary model of the exchange rate, relative money supply is positively related to nominal exchange rates, while relative real income is negatively related to nominal exchange rates. Therefore, this study reveals the importance of relative real money supply and relative income for the exchange rate market players to predict and monitor ASEAN-5 exchange rates.

Faktor-Faktor Yang Mempengaruhi Nilai Tukar Dollar Amerika Serikat Terhadap Rupiah Tahun 2000–2013

2017 ◽  
Vol 1 (2) ◽  
pp. 177-191
Author(s):  
Rizki Rahma Kusumadewi ◽  
Wahyu Widayat
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Money Supply ◽  
Time Series Data ◽  
The United States ◽  
Economic Conditions ◽  
Series Data ◽  
Arch Model ◽  
United States Dollar ◽  
The Exchange Rate

Exchange rate is one tool to measure a country’s economic conditions. The growth of a stable currency value indicates that the country has a relatively good economic conditions or stable. This study has the purpose to analyze the factors that affect the exchange rate of the Indonesian Rupiah against the United States Dollar in the period of 2000-2013. The data used in this study is a secondary data which are time series data, made up of exports, imports, inflation, the BI rate, Gross Domestic Product (GDP), and the money supply (M1) in the quarter base, from first quarter on 2000 to fourth quarter on 2013. Regression model time series data used the ARCH-GARCH with ARCH model selection indicates that the variables that significantly influence the exchange rate are exports, inflation, the central bank rate and the money supply (M1). Whereas import and GDP did not give any influence.

From Scarcity to Abundance: Achieving Quality-Assured Mass Higher Education

2011 ◽  
Vol 15 (2) ◽  
Author(s):  
Peter P. Smith
Keyword(s):  
Higher Education ◽  
Knowledge Economy ◽  
Good Practice ◽  
The United States ◽  
The Other ◽  
Secondary System ◽  
Mass Higher Education ◽  
Post Secondary ◽  
One Year ◽  
The One

The United States is in a bind. On the one hand, we need millions of additional citizens with at least one year of successful post-secondary experience to adapt to the knowledge economy. Both the Gates and Lumina Foundations, and our President, have championed this goal in different ways. On the other hand, we have a post-secondary system that is trapped between rising costs and stagnant effectiveness, seemingly unable to respond effectively to this challenge. This paper analyzes several aspects of this problem, describes changes in the society that create the basis for solutions, and offers several examples from Kaplan University of emerging practice that suggests what good practice might look like in a world where quality-assured mass higher education is the norm.

Looking for Something to Signify

Screen Bodies ◽  
2020 ◽  
Vol 5 (2) ◽  
pp. 22-37
Author(s):  
David Yagüe González
Keyword(s):  
United States ◽  
Social Norms ◽  
Daily Life ◽  
The United States ◽  
The One

The behaviors and actions that an individual carries out in their daily life and how they are translated by their society overdetermine the gender one might have—or not—according to social norms. However, do the postulates enounced by feminist and queer Western thinkers still maintain their validity when the context changes? Can the performances of gender carry out their validity when the landscape is other than the one in Europe or the United States? And how can the context of drag complicate these matters? These are the questions that this article will try to answer by analyzing the 2015 movie Viva by Irish director Paddy Breathnach.

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