scholarly journals The impact of budget deficit onto the exchange rate

2005 ◽  
Vol 53 (3) ◽  
pp. 305-322
Author(s):  
Karel Vít
Keyword(s):  
Exchange Rate ◽  
Budget Deficit ◽  
The Exchange Rate ◽  
The Impact

scholarly journals Estimating the Impact of Devaluation the Exchange Rate on Inflation: A Cause Study of Iraq Using ARDL Model

Webology ◽  
2021 ◽  
Vol 18 (2) ◽  
pp. 475-486
Author(s):  
Niam A. Fawaz ◽  
Saad A. Hamaad
Keyword(s):  
Exchange Rate ◽  
Budget Deficit ◽  
Balance Of Payments ◽  
General Level ◽  
Monetary Policies ◽  
Ardl Model ◽  
Currency Exchange ◽  
Import And Export ◽  
The Exchange Rate ◽  
The Impact

The exchange rate tool is one of the most important macroeconomic tools that affect many variables, including the general level of prices, investment, import and export. In the case of a deteriorating economy such as the Iraqi economy, which suffers from a high import rate of final goods and intermediate goods, which are considered inputs to production processes, means exit Foreign exchange to abroad that affects the position of the balance of payments and its imbalance. It is very abnormal for countries to reduce the value of their currency exchange for financing reasons related to financing their public budget deficit without taking into account macroeconomic variables. All of these matters reflect a clear confusion of the fiscal and the monetary policies. The results of the current study by using the ARDL model have proven the direct impact of currency devaluation on inflation.

scholarly journals DAMPAK MONETER KEBIJAKAN DEFISIT ANGGARAN PEMERINTAH DAN PERANAN ASA NALAR DALAM SIMULASI MODEL MAKRO-EKONOMI INDONESIA (1983:1-2002:4)

2005 ◽  
Vol 7 (2) ◽  
Author(s):  
R. Maryatmo
Keyword(s):  
Exchange Rate ◽  
Budget Deficit ◽  
Price Level ◽  
Rational Expectation ◽  
Reduced Form ◽  
Causality Test ◽  
Long Run ◽  
Short Run ◽  
The Exchange Rate ◽  
The Impact

The purpose of this research is to observe the impact of the budget deficit policy on the macroeconomic variables in general, and specifically on the monetary variables in the short and long run.We apply macroeconomic model with rational expectation specification to allow agents altering their economic decision in encountering the authority policies. The model constructed contains eight (8) long run behavior equations, eight (8) short run behavior equations, four (4) rational expectation equations, and at least twelve (12) identity equations. The parameters are estimated by using the Two Stage Least Squares (2SLS) method. The endogenous variables which has become the independent variables are replaced by the instrument al variables. The instrumental variables are obtained from the reduced form structural equations.The statistical test on the impact of budget deficit on monetary variables are conducted by using reduced form equations and causality test. Both of the tests show that budget deficit through the government revenue mechanism affects the interest rate in the short and long run. In the short run through government expenditure mechanism, budget deficit would affect the exchange rate and price level. In the long run, however, causality tests show that the exchange rate and price level would in turn affect the budget deficit.Keywords: macro model, monetary policy, fiscal budgetJEL: B22, D84, E44, E63

The influence of inflation targeting on the pass-through effect of the exchange rate

2018 ◽  
pp. 70-84
Author(s):  
Ph. S. Kartaev ◽  
Yu. I. Yakimova
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Policy Regime ◽  
Short And Long Term ◽  
The Exchange Rate ◽  
Pass Through ◽  
The Impact

The paper studies the impact of the transition to the inflation targeting regime on the magnitude of the pass-through effect of the exchange rate to prices. We analyze cross-country panel data on developed and developing countries. It is shown that the transition to this regime of monetary policy contributes to a significant reduction in both the short- and long-term pass-through effects. This decline is stronger in developing countries. We identify the main channels that ensure the influence of the monetary policy regime on the pass-through effect, and examine their performance. In addition, we analyze the data of time series for Russia. It was concluded that even there the transition to inflation targeting led to a decrease in the dependence of the level of inflation on fluctuations in the ruble exchange rate.

The long-run stability of a small, open economy under crawling peg regime

2002 ◽  
Vol 52 (1) ◽  
pp. 57-78
Author(s):  
S. Çiftçioğlu
Keyword(s):  
Exchange Rate ◽  
Open Economy ◽  
Risk Premium ◽  
Small Open Economy ◽  
Exchange Rate Policy ◽  
Price Stability ◽  
Output Stability ◽  
Long Run ◽  
The Exchange Rate ◽  
The Impact

The paper analyses the long-run (steady-state) output and price stability of a small, open economy which adopts a “crawling-peg” type of exchange-rate regime in the presence of various kinds of random shocks. Analytical and simulation results suggest that with the exception of money demand shocks, an exchange rate policy which involves a relatively higher rate of indexation of the exchange rate to price level is likely to lead to the worsening of price stability for all types of shocks. On the other hand, the impact of adopting such a policy on output stability depends on the type of the shock; for policy shocks to the exchange rate and shocks to output demand, output stability is worsened whereas for the shocks to risk premium of domestic assets, supply price of domestic output and the wage rate, better output stability is achieved in the long run.

scholarly journals The Impact of Oil Price Shocks on National Income: Evidence from Azerbaijan

Energies ◽  
2021 ◽  
Vol 14 (6) ◽  
pp. 1695
Author(s):  
Shahriyar Mukhtarov ◽  
Sugra Humbatova ◽  
Mubariz Mammadli ◽  
Natig Gadim‒Oglu Hajiyev
Keyword(s):  
Exchange Rate ◽  
Oil Price ◽  
Gdp Per Capita ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Total Trade ◽  
Trade Turnover ◽  
Per Capita ◽  
The Exchange Rate ◽  
The Impact

This study investigates the influence of oil price shocks on GDP per capita, exchange rate, and total trade turnover in Azerbaijan using the Structural Vector Autoregressive (SVAR) method to data collected from 1992 to 2019. The estimation results of the SVAR method conclude that oil price shocks (rise in oil prices) affect GDP per capita and total trade turnover positively, whereas its influence on the exchange rate is negative in the case of Azerbaijan. According to results of this study, Azerbaijan and similar oil-exporting countries should reduce the dependence of GDP per capita, the exchange rate, and total trade turnover from oil resources and its prices in the global market. Therefore, these countries should attempt to the diversification of GDP per capita, the exchange rate, and other sources of total trade turnover.

scholarly journals The Impact of Russia’s Oil-Dominated Energy Economic Changes on the Exchange Rate of Russian Ruble – Chinese Renminbi

2017 ◽  
Vol 13 (22) ◽  
pp. 173
Author(s):  
Maoguo Wu ◽  
Yue Yu
Keyword(s):  
Economic Development ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Explanatory Power ◽  
Close Relation ◽  
Policy Implications ◽  
The Exchange Rate ◽  
Exchange Rate Changes ◽  
Pillar Industry ◽  
The Impact

Russia’s economic development has a close relation with China, due to geographical and historical reasons. This paper investigates whether the ruble – renminbi exchange rate changes accordingly when the pillar industry of Russia is drastically changing, and how the exchange rate changes and how it affects Russia’s economic development. In this paper, data of 7 variables spanning 122 months are selected based on related literature and availability of data. Regression analysis and empirical tests are carried out consequently. The results show that the energy price index represented by oil prices is negatively correlated with the exchange rate, and the explanatory power is as high as 41.1%. Following basic arbitrage methods and strategies, this paper verifies the feasibility of using arbitrage by comparing actual exchange rates with forecasted exchange rates. According to empirical results, problems witnessed in the process of ruble internationalization provides policy implications for China. China’s economy is utilized as an example to discuss the shortcomings of Russia’s economy. Related solutions are proposed.

scholarly journals The price of the lockdown: The effects of social distancing on the Indian economy and business during the COVID-19 pandemic

2021 ◽  
Vol 23 (1) ◽  
pp. 85-99
Author(s):  
Hasnan Baber ◽  
Rao Tripati
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Stock Prices ◽  
Economic Activity ◽  
International Travel ◽  
Business Activity ◽  
Religious Activities ◽  
Social Distancing ◽  
The Exchange Rate ◽  
The Impact

The decision on immediate lockdown in India put economic, social and religious activities to a grinding halt. The paper examines the impact of the lockdown and social distancing policies on economic activities in India, using a multivariate econometric model for the data collected in the period from 1st January to 31st August 2020. While the social distancing policy is captured in terms of internal movement, domestic travel and international travel restrictions, its effect on the economic activity and the business activity is captured through stock prices, purchasing managers' index and the exchange rate. Confirmed COVID-19 cases and related deaths are also used as the independent variables. The results reveal a significant negative impact of social distancing policies on the economic activity and the business activity, the stock market and the exchange rate. Furthermore, the economic stimulus provided by the Government could not bring a positive influence on the stock market.

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.

scholarly journals How Does Financial Sector Reacts After Special Events? An Event Study Analysis of Tunisia after the Revolution of 2011.

2014 ◽  
Vol 4 (2) ◽  
pp. 584-599
Author(s):  
Amira KADDOUR ◽  
Mourad ZMAMI
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Event Study ◽  
Banking Sector ◽  
Financial Sector ◽  
Study Analysis ◽  
Special Events ◽  
Egarch Model ◽  
The Exchange Rate ◽  
The Impact

Using an event study analysis, we aim to investigate the impact of political, economic, social and terrorism events, on the Tunisian financial sector, over the period of the Tunisian Revolution; from (12)2010 to (04)2014. Based on a daily data analysis using three selected variables ; Sectoral index of performance of Tunisian banks ,Index of Tunisian stock market and the exchange rate Euro/ Dinar,  the EGARCH model results have highlighted that general events decrease the return of our variables, and increase their volatility. More, results have shown that stock market is very sensitive to political and terrorism events, bad economic events increase the volatility of the exchange rate, and decrease the performance of banking sector. Political events remain the more important component, they affect negatively all the endogenous variables; coefficients in the mean equation show an important decline in term of the return of banking sector ,the stock market and the exchange rate.

Sign in / Sign up

Export Citation Format

Share Document