scholarly journals Exchange Rates and Wages in an Integrated World

2011 ◽  
Vol 3 (4) ◽  
pp. 53-84 ◽  
Author(s):  
Prachi Mishra ◽  
Antonio Spilimbergo
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Labor Markets ◽  
Market Integration ◽  
Labor Mobility ◽  
Labor Market Integration ◽  
External Adjustment ◽  
Foreign Labor ◽  
Pass Through ◽  
Using Data

We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981–2005, we find that the elasticity of domestic wages to real exchange rate is 0.15 after a year for countries with high barriers to external labor mobility, but about 0.40 in countries with low barriers to mobility. The result is robust to the inclusion of various controls, different measures of exchange rates, and definitions of labor market integration. These findings call for including labor mobility in macro models of external adjustment. (JEL F16, F31, J31)

The EU's Internal Market and the Free Movement of Labor

2017 ◽  
pp. 61-75 ◽  
Author(s):  
Zeynep Kaplan
Keyword(s):  
Labor Markets ◽  
Market Integration ◽  
Labor Mobility ◽  
Core Element ◽  
Labor Market Integration ◽  
The Core ◽  
Free Mobility ◽  
Recent Trends ◽  
European Labor Markets ◽  
The Eu

Free mobility of labor has been the core element of the European integration process. The aim of this chapter is to analyze the effects and challenges of the labor mobility within the EU. The analysis then focuses on the recent trends in labor mobility. Cross-border labor mobility remains low in the EU. The main reasons behind the low levels of labor mobility in the EU include linguistic and cultural reasons, as well as non-tariff barriers such as pension rules, recognition of professional qualification or social security differences. Removal of impediments to free mobility of labor and improvement of flexibility of the European labor markets will strengthen the EU's labor market integration.

scholarly journals Financial Market Integration in Pakistan: Evidence Using Post-1999 Data

2006 ◽  
Vol 45 (4II) ◽  
pp. 1041-1053
Author(s):  
Ahmed M. Khalid ◽  
Gulasekaran Rajaguru
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Interest Rates ◽  
Stock Prices ◽  
Market Integration ◽  
Multinational Firms ◽  
Academic Research ◽  
Balance Model ◽  
Goods Market ◽  
Pass Through

The recent wave of financial sector reforms and internationalisation in emerging markets has increased perceived interlinkages within various sectors of national financial markets. For example, the existence of a strong linkage between stock prices and exchange rates is a popular topic in academic research. Similarly, changes in stock prices and exchange rates are expected to influence movements in interest rates. A number of hypotheses suggest such a causal relationship. For instance, using a goods market approach, any changes in the value of currency would affect the competitiveness of multinational firms and hence influence stock prices [Dornbusch and Fischer (1980)]. Similarly, the hypotheses of ‘exchange rate pass-through’ and ‘interest rate pass-through’ suggest that changes in exchange rates and/or interest rates could affect stock prices. The portfolio balance model suggests that fluctuations in stock prices influence exchange rate changes.

Fear of Free Floating or Forced Exchange Rate Fixing

2004 ◽  
pp. 112-122
Author(s):  
O. Osipova
Keyword(s):  
Exchange Rate ◽  
Financial Crisis ◽  
Exchange Rates ◽  
Inflation Targeting ◽  
Exchange Rate Policy ◽  
Float Exchange Rate ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
Exchange Rate Arrangements ◽  
Pass Through

After the financial crisis at the end of the 1990 s many countries rejected fixed exchange rate policy. However actually they failed to proceed to announced "independent float" exchange rate arrangement. This might be due to the "fear of floating" or an irreversible result of inflation targeting central bank policy. In the article advantages and drawbacks of fixed and floating exchange rate arrangements are systematized. Features of new returning to exchange rates stabilization and possible risks of such policy for Russia are considered. Special attention is paid to the issue of choice of a "target" currency composite which can minimize external inflation pass-through.

scholarly journals Vehicle Currency Pricing and Exchange Rate Pass-Through

2021 ◽  
Author(s):  
Natalie Chen ◽  
Wanyu Chung ◽  
Dennis Novy
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Great Recession ◽  
Firm Level ◽  
Bilateral Exchange ◽  
The Great Recession ◽  
Pass Through ◽  
Exchange Rate Changes ◽  
Exchange Rate Pass Through ◽  
The Relationship

Abstract Using detailed firm-level transactions data for UK imports, we find that invoicing in a vehicle currency is pervasive, with more than half of the transactions in our sample invoiced in neither sterling nor the exporter’s currency. We then study the relationship between invoicing currencies and the response of import unit values to exchange rate changes. We find that for transactions invoiced in a vehicle currency, import unit values are much more sensitive to changes in the vehicle currency than in the bilateral exchange rate. Pass-through therefore substantially increases once we account for vehicle currencies. This result helps to explain why UK inflation turned out higher than expected when sterling depreciated during the Great Recession and after the Brexit referendum. Finally, within a conceptual framework we show why bilateral exchange rates are not suitable for capturing exchange rate pass-through under vehicle currency pricing. Overall, our results help to clarify why the literature often finds a disconnect between exchange rates and prices when vehicle currencies are not accounted for.

Conclusions

2016 ◽  
Author(s):  
Jeffry A. Frieden
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Exchange Rate Policy ◽  
Theoretical Argument ◽  
Economic Agents ◽  
Cross Border ◽  
Domestic Prices ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
Export Competition

This chapter summarizes key findings. This book makes a simple theoretical argument about the distributional implications of exchange rate policy. It suggests that economic actors with important cross-border interests, exposed to currency volatility, will tend to prefer more stable and predictable exchange rates. It also claims that tradables producers will, all else being equal, tend to prefer a depreciated real exchange rate. These concerns will be tempered by the extent of exchange rate pass-through—that is, the degree to which currency movements affect domestic prices. The analysis in this book shows that countries whose economic agents are more involved in cross-border trade are more likely to fix their exchange rates in order to reduce currency volatility. Countries with large groups susceptible to import or export competition—import-competing manufacturers and export farmers—are more likely to choose flexible exchange rates that allow currency depreciations. Governments facing an election encourage or allow currency appreciation that increases the purchasing power of consumers.

scholarly journals A Study on the Pass-Through Rate of the Exchange Rate on the Liquid Natural Gas (LNG) Import Price in China

2020 ◽  
Vol 8 (4) ◽  
pp. 70
Author(s):  
Chaofeng Tang ◽  
Kentaka Aruga
Keyword(s):  
Exchange Rate ◽  
Natural Gas ◽  
Exchange Rates ◽  
Import Price ◽  
Monetary Reform ◽  
Lag Effect ◽  
The Exchange Rate ◽  
Pass Through ◽  
Liquid Natural Gas ◽  
The Impact

The Chinese liquid natural gas (LNG) import price has been unstable because the stability of LNG import prices is related to changes in the exchange rates. This paper analyzes the pass-through rate of the Chinese Yuan (CNY) and Japanese Yen (JPY) on the Chinese LNG import price. The Time-Varying Parameter vector autoregressive (TVP-VAR) model is adopted to verify the pass-through rate of the exchange rates on the LNG import price using the Markov chain Monte Carlo (MCMC) method. Since September 2005, the JPY pass-through rate on the Chinese LNG import price has been decreasing while that of the CNY has been increasing. Notably, the pass-through rate of CNY began to exceed that of JPY after 2008. Moreover, since 2005, the lag effect of the CNY on the Chinese LNG import price became longer compared to JPY. If any new currency reform of the CNY is implemented in the future, then the impact of JPY on the Chinese LNG import price could be reduced and the lag effect of the CNY on the Chinese LNG import price could become longer. Therefore, the fluctuation of the CNY is becoming an important factor in understanding the movements of the Chinese LNG import price. This implies the significance of considering the effect of the exchange rate on an energy market when the market is influenced by a monetary reform of the importing country.

Antidumping Investigations and the Pass-Through of Antidumping Duties and Exchange Rates: Reply

2010 ◽  
Vol 100 (3) ◽  
pp. 1283-1284 ◽  
Author(s):  
Bruce A Blonigen ◽  
Stephen E Haynes
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Empirical Evidence ◽  
Structural Breaks ◽  
Theoretical Explanation ◽  
Antidumping Duties ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
The U.S

This reply responds to a comment that correctly identifies an invalid assumption in our original article that antidumping (AD) duties are subtracted from the U.S. price when calculating AD duties in administrative reviews. While this point invalidates our theoretical explanation and empirical evidence on the magnitude of AD duty pass-through, it does not affect our original article's theory or empirical evidence on the magnitude of exchange rate pass-through, or the presence of structural breaks in both the AD duty and exchange-rate pass-through coefficients stemming from AD investigations and orders.

scholarly journals ‘You Need to Know Someone Who Knows Someone’: International Students’ Job Search Experiences

2020 ◽  
Author(s):  
Rolle Alho
Keyword(s):  
Labor Market ◽  
International Students ◽  
Labor Markets ◽  
Job Search ◽  
Market Integration ◽  
International Student ◽  
Theoretical Framework ◽  
Labor Market Integration ◽  
Highly Educated ◽  
Institutional Contexts

The article analyzes how 31 international students (IS) entered the Finnish labor market as they graduated from Finnish universities. Despite a growing interest in international student migration (ISM), there are few studies that analyze the firsthand experiences of IS as they seek to enter the receiving-country labor markets as they graduate. This article contributes to the topic by showing how the interviewees of this study managed to enter the receiving-country labor markets, which are embedded in national, cultural, and institutional contexts that require context-bound knowledge of particular recruitment patterns.The contribution of the article lies in (1) providing new insights on an understudied topic: IS’ experiences of finding jobs in the country of graduation, and, in (2) constructing a theoretical framework for analyzing IS’ job search in the countries ofgraduation. More broadly, the article contributes to the studies on highly educated migrants’ labor market integration by shedding light on the experiences in a Nordic setting.

Europe’s promise for jobs?

2018 ◽  
pp. 419-442
Author(s):  
Thees F. Spreckelsen ◽  
Janine Leschke ◽  
Martin Seeleib-Kaiser
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Market Integration ◽  
Southern Europe ◽  
Labor Market Integration ◽  
Nonstandard Employment ◽  
Migrant Youth ◽  
Before And After ◽  
Institutional Differences ◽  
Employment Rates

This chapter examines the labor market integration of recent migrant youth from Central and Eastern Europe (EU8) countries, Bulgaria and Romania (EU2), Southern Europe, and the remaining European Union in the German and UK labor markets. The chapter measures levels of employment, income, marginal employment, fixed-term employment, (solo) self-employment, and the skills/qualification mismatch of each group compared to nationals before and after the financial crisis. Despite institutional differences, young EU citizens are well integrated into the respective labor markets (especially in the United Kingdom) in terms of employment rates. However, EU youth migrants’ qualitative labor market integration seems to mirror the existing stratification across regions of Europe: EU8 and EU2 citizens often work in precarious and nonstandard employment, youth from Southern Europe take a middle position, and youth from the remaining EU countries do as well or better on several indicators compared to their native peers.

Exchange Rates and Trade Balance Adjustment in Emerging Market Economies

Policy Papers ◽  
2006 ◽  
Vol 2006 (59) ◽  
Author(s):  
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Trade Balance ◽  
Complex Dynamics ◽  
Emerging Market ◽  
Nominal Exchange Rate ◽  
Relative Price ◽  
Relative Prices ◽  
Import And Export ◽  
Pass Through

The paper finds that simple econometric specifications yield surprising rich and complex dynamics -- relative prices respond to the nominal exchange rate and pass-through effects, import and export volumes respond to relative price changes, and the trade balance responds to changes in import and export values.

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