scholarly journals The Access to Demand

2015 ◽  
Vol 1 (1) ◽  
pp. 35-43 ◽  
Author(s):  
Luiz Carlos Bresser-Pereira
Keyword(s):  
Developing Countries ◽  
Exchange Rate ◽  
Full Employment ◽  
Aggregate Demand ◽  
Business Enterprises ◽  
The Exchange Rate ◽  
Under Construction

In this paper I argue that, in developing countries, sufficient aggregate demand is not enough to motivate investment and achieve full employment. Besides, according to the Keynesian developmental macroeconomics under construction, competent business enterprises must have access to that demand – access which is denied to most of them because developing countries face the tendency to the cyclical and chronic overvaluation of the exchange rate.

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.

How Structural Macroeconomic Shocks Can Explain Exchange Rate Pass-Through in Developing Countries: A Common Trend Approach

2009 ◽  
Vol 9 (2) ◽  
pp. 1850161 ◽  
Author(s):  
Karim Barhoumi
Keyword(s):  
Developing Countries ◽  
Exchange Rate ◽  
Traditional Approach ◽  
Macroeconomic Shocks ◽  
Structural Shocks ◽  
Long Run ◽  
The Exchange Rate ◽  
Pass Through ◽  
New Formulation ◽  
Exchange Rate Pass Through

This paper investigates the exchange rate pass-through in 12 developing countries during the period 1980-2001 by adopting a new formulation. Rather than considering the traditional approach based on the exogenous exchange rate movement through correlation between exchange rate and prices, we focus on fundamental macroeconomic shocks that affect both exchange rate and prices. In order to do that, we employ long-run restrictions à la Blanchard and Quah (1989) to identify the different shocks through an open economic macroeconomic model (ISLM framework). We use the common trends approach proposed by Warne et al (1992). This allows us to calculate the pass-through as the responses of the exchange rate, CPI and import prices to the supply, the relative demand, the nominal and the foreign prices shocks. We show that the pass-through ratio in developing countries is different when considering different structural shocks.

scholarly journals DAMPAK FLUKTUASI NILAI TUKAR TERHADAP OUTPUT DAN HARGA: PERBANDINGAN DUA REZIM NILAI TUKAR

2007 ◽  
Vol 10 (1) ◽  
pp. 3-22
Author(s):  
Jardine A Husman
Keyword(s):  
Exchange Rate ◽  
Fiscal Policy ◽  
Exchange Rate Regime ◽  
Aggregate Demand ◽  
Import Price ◽  
Regime Switch ◽  
Aggregate Supply ◽  
Rate Fluctuation ◽  
The Exchange Rate ◽  
The Impact

This paper analyzes the impact of exchange rate fluctuation on the output and price in two different regimes. The model employed distinguishes four different sources of impacts on the output and price, namely the anticipated and the un-anticipated exchange rate movement, the aggregate demand and the aggregate supply shock.The result confirms the impact of the exchange rate regime switch on how the exchange rate influences the output. The net impact of Rupiah depreciation will expand the output, indicating the dominance of the aggregate the demand shock through the competitive advantage than the aggregate supply shock through import price effect.The regime switch also alters the effectiveness of the monetary and the fiscal policy on the output. The magnitude of monetary and fiscal policy is much larger than the exchange rate impact on output, both managed and free floating regime.Keywords: exchange rate, anticipated vs. unanticipated depreciation, supply vs. demand channels.JEL Classification: F41, F43, F31

scholarly journals Coping with the Exceptional Economic Problems in Turkey: A Field Survey on SMES

2019 ◽  
Vol 12 (2) ◽  
pp. 109-126 ◽  
Author(s):  
Ercan Özen
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Exchange Rate ◽  
Exchange Rate Volatility ◽  
Developed Countries ◽  
Business Owners ◽  
Important Place ◽  
Exchange Rate Fluctuations ◽  
The Exchange Rate ◽  
The Impact

Abstract Developing countries need higher economic growth to reach the level of developed countries. When developing countries exceed the potential economic growth, problems, such as, high external debt and high current deficit emerge. Such situations increase the financial risk of the country; in addition, international political risks, fluctuations in capital inflows and some manipulative movements have subjected countries to extreme exchange rate fluctuations. Purposes of this research: (1) to uncover the impact of high exchange rate volatility on small business activities and (2) to determine whether the level of exposure of the exchange rate shock on business owners varies by age. The methodology of the study involved a survey administered to 390 small and medium-sized enterprises (SMEs). The findings of the study show that after a period of significant exchange rate fluctuations, business activities were negatively affected, sales decreased, and job cuts increased. On the other hand, the exchange rate effect was mostly felt by all business owners of different ages. According to the study, it can be concluded that small enterprises are vulnerable to rising exchange rate volatility. The effect on SMEs with more work experience is not different. In order to alleviate the effects of adverse exchange rate movements, enterprises should be more cautious in their activities. Two suggestions can be made at this point: (i) Governments should follow optimal growth policies and (ii) Small businesses that have an important place in the economy should be made aware of the exchange rate risk and crisis management.

scholarly journals IMPACT EXPORT DIVERSIFICATION ON EXCHANGE RATE REGIME CHOICE

2017 ◽  
Vol 2 (2) ◽  
pp. 25
Author(s):  
Eka Putri Mayangsari
Keyword(s):  
Developing Countries ◽  
Exchange Rate ◽  
Positive Impact ◽  
Exchange Rate Regime ◽  
Extensive Margin ◽  
Export Diversification ◽  
Intensive Margin ◽  
The Exchange Rate ◽  
Emerging And Developing Countries ◽  
The Impact

ABSTRACT The choice of exchange rate regime is the most relevant decision in the economic world that has to be faced by the economic authority until now. Exchange rate regime that is applied by one country become a controversial debate after the Asia’s crisis in the year 1997-1998, especially for developing countries and emerging economies in Asia. The purpose of this research is to see the impact of export diversification, intensive margin and extensive margin to the choice of the exchange rate regime in nine emerging and developing countries in Asia 1991-2014.This research uses the panel logistic regression model to analyze the two model that are used in the research; they are: model 1 (the impact of export diversification to the exchange rate regime),and model 2 (the impact of extensive margin and intensive margin to the exchange rate regime. To avoid and to lessen the chances of endogeneity problem therefore, all of the independent variables and the control variable must be lagged in one period.The results of the regression shows that export diversification have a significant positive impact on the exchange rate regime. When export diversification is decomposed into intensive margin and extensive margins, the result shows that the extensive margins also have a significant positive impact towards the exchange rate regime, while the intensive margin does not show any significant impact towards the exchange rate regime choice. Keywords: exchange rate regime, export diversification, intensive margin, extensive margin, emerging and developing countries in Asia. 

scholarly journals A New Method of Estimating Equilibrium Real Exchange Rate in Developing Countries

2016 ◽  
Vol 8 (3) ◽  
pp. 171
Author(s):  
Renhong Wu
Keyword(s):  
Developing Countries ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Purchasing Power Parity ◽  
New Method ◽  
Power Parity ◽  
Equilibrium Exchange Rate ◽  
Goods And Services ◽  
Equilibrium Exchange ◽  
The Exchange Rate

How to assess the misalignments of real exchange rate in developing countries has been a difficult and unresolved issue. Over the decades, researchers have not found desirable methods to estimate the “Equilibrium Exchange Rate”. The Purchasing Power Parity (PPP) approach has limitations, and the fixed or managed floating exchange rate regimes in developing countries make the estimating more difficult. The purpose of this paper is to discuss the limitations of the Macroeconomic Balance approach and the existing PPP approach for estimating equilibrium exchange rate in developing countries, and introduce a new method–the Adjusted PPP method to assess exchange rate in developing countries. The new method includes the Human Development Index (HDI) to adjust the traditional PPP estimates. By introducing the adjustments of HDI, the big quality differences in non-tradable goods and services between developed and developing countries are adjusted for the exchange rate estimates. Also, as a case study, the paper estimated the exchange rate in China of 1991-2013.

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