International Liquidity: Needs and Problems

1966 ◽  
Vol 22 (1) ◽  
pp. 13-19
Author(s):  
David L. Grove
Keyword(s):  
International Liquidity

scholarly journals International Liquidity and Exchange Rate Dynamics *

2015 ◽  
Vol 130 (3) ◽  
pp. 1369-1420 ◽  
Author(s):  
Xavier Gabaix ◽  
Matteo Maggiori
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Exchange Rates ◽  
Capital Flows ◽  
Risk Sharing ◽  
Market Model ◽  
International Liquidity ◽  
Balance Sheets ◽  
Macroeconomic Analysis ◽  
International Pricing

Abstract We provide a theory of the determination of exchange rates based on capital flows in imperfect financial markets. Capital flows drive exchange rates by altering the balance sheets of financiers that bear the risks resulting from international imbalances in the demand for financial assets. Such alterations to their balance sheets cause financiers to change their required compensation for holding currency risk, thus affecting both the level and volatility of exchange rates. Our theory of exchange rate determination in imperfect financial markets not only helps rationalize the empirical disconnect between exchange rates and traditional macroeconomic fundamentals, it also has real consequences for output and risk sharing. Exchange rates are sensitive to imbalances in financial markets and seldom perform the shock absorption role that is central to traditional theoretical macroeconomic analysis. Our framework is flexible; it accommodates a number of important modeling features within an imperfect financial market model, such as nontradables, production, money, sticky prices or wages, various forms of international pricing-to-market, and unemployment.

Determinants of Spot and Forward Interest Rates in Brazil in an International Liquidity Scenario: An Econometric Analysis for the Period 2007-2019

2021 ◽  
Vol 10 (1) ◽  
pp. 19
Author(s):  
Pedro Raffy Vartanian ◽  
Sérgio Gozzi Citro ◽  
Paulo Rogério Scarano
Keyword(s):  
Financial Crisis ◽  
Interest Rates ◽  
Global Financial Crisis ◽  
International Liquidity ◽  
Vector Autoregressive ◽  
International Financial Crises ◽  
International Financial Crisis ◽  
Level Of Activity ◽  
Systemic Crisis ◽  
The Global Financial Crisis

Over the last 25 years, Brazil has been among the countries with the highest interest rates globally. High interest rates have been necessary during several recent times, such as in the period from 1997 to 1999, due to the repeated international financial crises that have plagued the country. From 1999, a sustained path of interest rate reduction begun. With the outbreak of the 2008 international financial crisis, the Brazilian monetary authorities promoted a new round of falling domestic interest rates in response to the recessive effects and the threat of a systemic crisis that could hang over the national financial system. In 2012, a set of interventionist nature policies led to a decrease in the Selic rate. Thus, looking at the last 25 years, it appears that many factors have started to influence the trajectory of Brazilian interest rates. In this context, the present work aims to identify, based on empirical research, the determinants of spot and future interest rates. As a methodology, the research uses a multivariate econometric vector autoregressive model (VAR) with error correction (VEC). The analysis covers the years 2017 to 2019, corresponding to the period in the aftermath of the global financial crisis of 2008. The results evidence that both the spot rate and the DI future can be determined by the fluctuations in the level of inflation and by the level of activity and the real exchange rate, in addition to the effects of the lagged variables themselves.

Empire and High Finance: South Africa and the International Gold Standard 1890–1914

1982 ◽  
Vol 23 (4) ◽  
pp. 529-548 ◽  
Author(s):  
Jean Jacques Van-Helten
Keyword(s):  
South Africa ◽  
South African ◽  
Gold Standard ◽  
Financial Crises ◽  
Mining Industry ◽  
International Liquidity ◽  
Monetary Relations ◽  
Marketing Costs ◽  
Gold Producer ◽  
The Impact

Within twelve years of the discovery of gold on the Witwatersrand in 1886 the Transvaal was producing over one quarter of the world's annual output of gold. The Transvaal's emergence as a major gold producer took place at a time when global monetary relations were dominated by the operations of the gold standard. This article illustrates the impact of the Witwatersrand discoveries on the working of the international gold standard to 1914 and suggests that newly mined gold from South Africa eased international liquidity problems by facilitating an expansion of the gold base and money supplies without the dangers of inflation. Transvaal gold was shipped to London and sold in the City's bullion market. The establishment by South African mining companies of a complex London network of brokerage, insurance, refining and marketing facilities of gold is considered in detail. It is demonstrated that, when faced with a fixed price of gold and rising working costs on the Rand, the mining industry actively sought to minimize the marketing costs of gold in London to offset general cost inflation and to increase revenue. Finally, at the turn of the century, the Bank of England still occupied a hegemonic position in the international financial system, although, as this article shows, this hegemony was subject to periodic financial crises such as the collapse of Barings in 1890. The Bank‘s problems were thought to stem from a severe shortage of gold reserves. Recently, it has been argued that by the late 1890s British politicians and financiers encouraged the overthrow of the Kruger regime in the Transvaal in order to gain physical control over the Rand mines and thereby ease the Bank's shortages of gold. However, there are problems with this formulation and the article concludes with an alternative consideration of the complex relationship between the supplies of newly mined Transvaal gold, the international gold standard and the Bank of England's financial crises.

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