scholarly journals Exchange rate policy, growth, and foreign trade in China

2011 ◽  
Vol 56 (190) ◽  
pp. 103-139 ◽  
Author(s):  
Mirjana Gligoric
Keyword(s):  
Exchange Rate ◽  
Foreign Trade ◽  
Foreign Exchange ◽  
Global Economy ◽  
Trade Deficit ◽  
Exchange Rate Policy ◽  
Negative Effects ◽  
Bilateral Relations ◽  
The Usa ◽  
Rate Policy

This paper analyzes a hot topic: the influence of an undervalued currency on macroeconomic variables - primarily on the economic growth and trade balance of a country, but also on employment, foreign exchange reserves, competition, and living standards. It also reviews and explains the consequences of yuan undervaluation, points out the need for its appreciation, and states the negative effects that stem from this measure. Special attention is given to the problematic bilateral relations between China and the USA and the reasons why Americans are worried about the exchange rate policy that China implements. Although yuan appreciation would decrease the American foreign trade deficit, it also raises the question of further financing of the American deficit. There are also other problems that the possible appreciation would cause for the American economy, due to the effect of J-curve, passthrough, larger costs of input imported from China, etc. Therefore, Chinese foreign exchange policy is an important subject, but it is not the solution to the problems of the global economy - which have deeper roots than that. However, there is no excuse for China implementing unfair exchange rate policies, or replacing such policies with controversial protectionist policies (as some authors have suggested).

The Effect of Authorita rian Regime Type on Exchange Rate Policy

2014 ◽  
Vol 66 (3) ◽  
pp. 491-529 ◽  
Author(s):  
David A. Steinberg ◽  
Krishan Malhotra
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Global Economy ◽  
Exchange Rate Policy ◽  
Economic Policies ◽  
Foreign Economic Policy ◽  
Cross Sectional ◽  
Data Set ◽  
Military Regimes ◽  
Rate Policy

Conventional wisdom holds that autocracies are more likely than democracies to adopt interventionist and protectionist economic policies, including fixed and undervalued exchange rates. This article suggests that this view is only partially correct: nondemocracies are a heterogeneous grouping, and only some types of authoritarian regimes adopt different foreign economic policies from those of their democratic counterparts. Using the example of exchange rate policy, the authors show that foreign economic policy varies across monarchic, military, and civilian dictatorships. More specifically, they hypothesize that monarchies and military regimes are more likely than democracies and civilian dictatorships to maintain fixed exchange rate regimes because the former regimes have smaller “selectorates” than the latter. The authors also expect that monarchies and civilian dictatorships maintain more undervalued exchange rates than democracies and military regimes because the former regimes provide their leaders with greater tenure security than the latter regimes. These hypotheses are evaluated using a time-series–cross-sectional data set of a large sample of developing countries from 1973 to 2006. The statistical results accord with these predictions. These findings indicate that the ways in which democracies engage with the global economy may be less unique than many believe.

Thailand, Malaysia and the Philippines: Currency Crisis

1997 ◽  
Vol 8 (5) ◽  
pp. 115-115
Keyword(s):  
Exchange Rate ◽  
The Philippines ◽  
Exchange Rate Policy ◽  
Negative Effects ◽  
Rate System ◽  
Bank Rate ◽  
Economic Fundamentals ◽  
Recent Developments ◽  
Rate Policy ◽  
Exchange Rate System

In response to recent developments, Thailand's exchange rate system has been changed, effective July 2, 1997, to a managed float, with the value of the baht being determined by market forces in line with economic fundamentals. To support the new exchange rate policy, the Bank of Thailand has raised the Bank Rate from 10.5 percent to 12.5 percent. The Thai authorities are also considering supplementary measures to alleviate potential negative effects on debt servicing and prices that may result from adjustments in the value of the baht.

scholarly journals Macro-economic Policies and Energy Security—Implications for a Chronic Energy Deficit Country

2014 ◽  
Vol 53 (3) ◽  
pp. 255-273
Author(s):  
Inayat U. Mangla ◽  
Jamshed Y. Uppal
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Energy Security ◽  
Capital Expenditure ◽  
Macroeconomic Policy ◽  
Volatile Oil ◽  
Jel Classification ◽  
Exchange Rate Policy ◽  
Energy Deficit ◽  
Rate Policy

The paper assesses the energy sector’s foreign exchange requirements for meeting energy consumption and for capital expenditures, and identifies its implications for the country’s macroeconomic policy and management. We develop a conceptual model for projecting the energy sector’s long-term requirements for foreign exchange. The model indicates that the country’s chronic dependence on oil imports is likely to expose the economy to high and volatile oil prices. A fundamental issue for Pakistan is how the energy projects requiring large inflows of foreign capital and technology will be financed. The main implication of our analysis is that there will be continuing pressure on the country’s foreign exchange resources. The demand for foreign exchange by the year 2024-25 is projected to be US$ 20-21 billion without the FDI in new power generation. However, when we include the requirements of foreign exchange for capital expenditure, the total FX requirements are in the range of US$ 23- 24 billion. An implication of the country’s chronic energy deficiency is that the macroeconomic policies, particularly the foreign exchange rate policy, need to be redefined to reflect the projected demands on hard currencies and their expected scarcity value. It is likely that Pakistan will remain dependent on foreign imports to meet its energy requirements for a long time and will need to generate commensurate foreign exchange resources to ensure longterm energy security. JEL classification: E66, F37, Q43 Keywords: Macroeconomic Policy, Exchange Rate Policy, Energy Security

The Iranian Foreign Exchange Policy And The Black Market for Dollars

1992 ◽  
Vol 24 (1) ◽  
pp. 101-125 ◽  
Author(s):  
M. Hashem Pesaran
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Foreign Debt ◽  
Black Market ◽  
Exchange Rate Policy ◽  
Official Exchange Rate ◽  
The Face ◽  
Rate Policy ◽  
The Government ◽  
Oil Revenues

As a result of the oil price shocks, the 1979 revolution, and the eight-year war with Iraq, fundamental changes have taken place in Iran's foreign exchange position as well as in its exchange rate policy. The viable data over the period 1979–1980 to 1988–1989 clearly show that, despite the revolutionary rhetoric, very little has been done to reduce the country's dependence on oil exports as a source of foreign exchange and government revenues. Instead, in the face of falling oil revenues and the country's increasing international isolation, coupled with the regime's unwillingness to incur foreign debt, the government has adopted a severe ‘import compression’ policy through selective tariffs and quotas, strict control of private and government imports by means of import licenses, and the imposition of foreign exchange allocations on government agencies. The result has been an ever-rising premium on the U.S. dollar in the ‘black’ market, a highly overvalued official exchange rate, a substantial increase in rent-seeking activities at the expense of production, a severe misallocation of resources, and loss of output and industrial capacity.

Exchange Rate Misalignment and International Law

2011 ◽  
Vol 105 (3) ◽  
pp. 423-476 ◽  
Author(s):  
Claus D. Zimmermann
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
International Law ◽  
Real Exchange Rate ◽  
Foreign Exchange ◽  
Exchange Rate Policy ◽  
Exchange Rate Misalignment ◽  
Rate Policy ◽  
Exchange Markets ◽  
Trade Conflicts

History is replete with examples where states have interfered with foreign exchange markets in order to influence exchange rates. The trade conflicts between the two world wars, for instance, were fought not only via the imposition of tariffs, but also via competitive devaluations. Since then, straightforward competitive devaluations have become a rare phenomenon; contemporary scenarios, in which exchange rate policies are criticized for their potentially protectionist impact, tend to be much more sophisticated. The exchange rate policy followed by China is certainly the outstanding, yet not exclusive, example. In recent years policymakers worldwide have criticized China for maintaining an undervalued real exchange rate as part of its strategy of export-led growth.

Development of foreign trade and balance of payments in the czech republic, hungary and poland

1998 ◽  
Vol 7 (2) ◽  
Author(s):  
Vladimír Tomšík
Keyword(s):  
Exchange Rate ◽  
Czech Republic ◽  
Foreign Trade ◽  
Central Europe ◽  
Exchange Rate Policy ◽  
Balance Of Payments ◽  
The Czech Republic ◽  
Economic Changes ◽  
National Currencies ◽  
Rate Policy

The objective of this paper is to analyse one of the greatest problems in the process of transformation of these three economies in the years 1990-1996 - foreign trade development. Following political changes in the countries of Eastern and Central Europe, economic changes had to be implemented that also implied changes in foreign trade. These crucial changes include abolition of foreign trade monopoly and its liberalisation, introduction of stepwise convertibility of national currencies (for transactions of balance of payments on the current account at first), changes in exchange rate policy, price liberalisation and territorial reorientation of foreign trade. All these changes were reflected in foreign trade development in all three countries compared.

scholarly journals OPTIMAL LEVEL OF FOREIGN RESERVES – EXAMPLE OF BOSNIA AND HERZEGOVINA

2014 ◽  
Vol 1 (9) ◽  
pp. 107
Author(s):  
Tijana Šoja
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Foreign Exchange ◽  
Optimal Level ◽  
Exchange Rate Policy ◽  
Foreign Exchange Reserves ◽  
Foreign Reserves ◽  
Special Review ◽  
Rate Policy ◽  
The Impact

The paper points to the conceptualdefinition of foreign exchange reserves, the role,importance and objectives for holding foreignexchange reserves as well as evaluating the requiredamount of foreign exchange reserves, or adequacy offoreign exchange reserves. Foreign exchangereserves are important assets in each country andthey are significantly affected by monetary policy,exchange rate policy or regulation and externalinstability and the impact of the crisis that may comefrom the environment. This paper presents a simpleway of estimates of adequacy and optimality offoreign exchange reserves, which are basis for theanalysis of foreign exchange reserves, as well as inthe construction of statistical and mathematicalmodels that detail the optimal level of internationalreserves. Special review was paid to the assessmentof the adequacy of foreign exchange reserves ofBosnia and Herzegovina, and the Central Bank ofBosnia and Herzegovina.

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