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Exchange Rate Determination in Natural Resources-Rich Economies Exchange Rate Determination in Natural Resources-Rich Economies
Ram?3n L?3pez
Revista de Análisis Económico (RAE) , 1989,
Abstract: Exchange Rate Determination in Natural Resources-Rich Economies This paper deals with the role of natural resources in the process of determination of the real exchange rate within the context of a resource-based sector that is important within the economy and heavily integrated with other sectors. In so doing, the article tries to shed some ligth on questions like: How does the effectiveness of nominal devaluation-in promoting real devaluation in a resource-rich economy compare with that in resource-poor economies? What are the implications for the responsiveness of trade flows to devaluation of explicitly considering a natural resource-based sector? Is devaluation more likely to be contractionary in a resource-rich economy rather than in a economy that does not depend on natural resources? How do changes in resource management policies (i.e., extraction taxes) affect the real exchange rate, trade balance and real income in the short run and long run? How have these results been affected by whether the resource is exploited under private property or under common property?
Determination of Parallel Market Exchange Rate Premium  [PDF]
Oluremi Ogun
Modern Economy (ME) , 2015, DOI: 10.4236/me.2015.62026
Abstract: A model of the determination of parallel market exchange rate premium in liberalized economies is presented. Clear distinction is made between fundamental and nominal determinants with economic justification(s) given for every variable. Likely data problems that may arise during implementation are discussed and suggestions on circumventing are made.
Monumental Behaviorism and Courageousness in Industrialized Economies Central Banks for Developing Economies Lessons  [PDF]
Seum Chhay, Nai-Wen Li, Lei Wang
Journal of Financial Risk Management (JFRM) , 2016, DOI: 10.4236/jfrm.2016.52011
Abstract: This paper looks for the monumental behaviorism and courageousness in the industrialized economies central banks’ monetary tools policy including interest rate policy and exchange rate regime is necessary to promote and boost the economic systems. The goal of paper is in a favor of the developing economies central banks to hail the comparative advantage from industrialized economies central banks functions and responsibilities, definitely in a usefulness to produce economic growth, high-employment, low-inflation targeting, price stability, and to mitigate credit defaults, financial risks, and volatility of assets price. This is of great importance for the effects of the central bank obligations on the positive outcomes such as economic growth, sustained macroeconomic parameters and constant financial sectors.
Random walk theory and exchange rate dynamics in transition economies  [PDF]
Gradojevi? Nikola,?akovi? Vladimir,An?eli? Goran
Panoeconomicus , 2010, DOI: 10.2298/pan1003303g
Abstract: This paper investigates the validity of the random walk theory in the Euro-Serbian dinar exchange rate market. We apply Andrew Lo and Archie MacKinlay's (1988) conventional variance ratio test and Jonathan Wright's (2000) non-parametric ranks and signs based variance ratio tests to the daily Euro/Serbian dinar exchange rate returns using the data from January 2005 - December 2008. Both types of variance ratio tests overwhelmingly reject the random walk hypothesis over the data span. To assess the robustness of our findings, we examine the forecasting performance of a non-linear, nonparametric model in the spirit of Francis Diebold and James Nason (1990) and find that it is able to significantly improve upon the random walk model, thus confirming the existence of foreign exchange market imperfections in a small transition economy such as Serbia. In the last part of the paper, we conduct a comparative study on how our results relate to those of other transition economies in the region.
The Credit Crunch and its Macroeconomic Impacts in Small-Open Developing Economies: A Dynamic Stochastic General Equilibrium Analysis
Christian Regobeth Kofi Ahortor
The International Journal of Applied Economics and Finance , 2010,
Abstract: This study, investigates the macroeconomic impacts of the credit crunch on small-open developing economies. A Dynamic Stochastic General Equilibrium (DSGE) model is developed as the theoretical framework, while the methodology is based on simulation and calibration using Markov Chain Monte Carlo (MCMC) techniques. The study establishes that the current credit crunch of 2007-2009 could generate devastating effects in developing economies just as in industrialized economies. The credit crunch could affect developing economies through three main channels the resource-flows channel, global prices channel and macroeconomic shocks channel. Overall, in a typical developing economy, the credit crunch could generate inflationary spiral, exchange rate appreciations, widening current account and budget deficits with increasing domestic borrowings and macroeconomic stagnation as reflected in declines in output, net exports, tax revenue and public investment. The study recommends that developing countries should plan for some kind of stimulus packages to assuage the adverse effects of the crisis on output, inflation, exchange rate and fiscal aggregates. The models developed in this study can be used in analyzing the effects of future external shocks on developing economies, which is a very important study in the field of economics.
The Impact of Exchange Rate Regime on Interest Rates in Latin America
Cuadernos de economía , 2010, DOI: 10.4067/S0717-68212010000100004
Abstract: we develop a theoretical framework to study the impact of the exchange rate regime in the interest rate determination. using vecm, we assess the role of both domestic conditions and us factors in the determination of eight latin-american countries? interest rates between february 1998 and april 2009. three countries have hard-peg while the remaining five follow alternative regimes. the long and short-run determinants of domestic rates as well as an impulse response analysis prove that economies with rigidly-fixed exchange rates do not bear a loss of monetary autonomy substantially higher than that of floating-rate economies, with the exception of brazil.
A Reappraisal of the Exchange Rate Determination: A Liquidity Approach  [cached]
Yan Li,Xiangming Fang
International Business Research , 2010, DOI: 10.5539/ibr.v3n4p50
Abstract: A dynamic general-equilibrium model with limited participation in financial markets is constructed to study the determination of nominal exchange rates in a small open economy with tradable and non-tradable goods. The qualitative and quantitative implications of this framework are assessed under flexible prices. Then, the panel dynamic OLS regression is applied to seek the empirical support for this liquidity-exchange rate model, a slight departure from the standard monetary-exchange rate model. The findings in the present paper shed light on the cointegration between the macroeconomic fundamentals and nominal exchange rates.
Satellite Communications: Impact on Developing Economies  [cached]
AAA. Atayero,Matthew K. Luka,Orya M. Kwaghdoo,Adeyemi A. Alatishe
Journal of Emerging Trends in Computing and Information Sciences , 2011,
Abstract: Access to information and communication infrastructure greatly enhances economic growth. When a reliable and affordable medium for information exchange is available, previously unanticipated developments ensue. Most areas in developing countries are sparsely populated and highly rural. Satellite communication is an excellent option for meeting this and many other pressing communication needs of developing economies. This paper examines the impact of satellite communication on developing economies, using popular examples as case study.
An Empirical Analysis on the Model of RMB Exchange Rate Determination

WEI Wei-xian,

系统工程理论与实践 , 2000,
Abstract: The objectives of this paper are twofold. First, it is to find an acceptable model that explains the movement of Renminbi (RMB) nominal spot exchange rate in terms of macroeconomic variables. Second, by using the exchange rate data from January 1994 to March 1998 between RMB and the U.S. dollar, this paper test if the model of RMB exchange rate determination presented in reference \ is a long\|run exchange rate determination model and the hypotheses posited in the model. Results show that macroeconomic variable is a significant factor in influencing the long\|run exchange rate. This is achieved by applying the techniques of cointegration and variance decomposition as well as impulse response analysis.
Exchange Rate Determination and Forecasting: Can the Microstructure Approach Rescue Us from the Exchange Rate Disparity?  [PDF]
Guangfeng Zhang,Qiong Zhang,Muhammad Tariq Majeed
ISRN Economics , 2013, DOI: 10.1155/2013/724259
Abstract: Using two measures of private information and high-frequency transaction data from the leading interdealer electronic broking system Reuters D2000-2, we examine the association between exchange rate return and contemporaneous order flow and the predictability power of lagged order flow on the future exchange rate return. Our empirical analysis demonstrates that at high frequency (5, 10, 15, 20, 25, and 30?min) there exists strong positive association between exchange rate returns and contemporaneous order flow. However, the results indicate weak predictability of order flow on the future exchange rate return. 1. Introduction In exchange rate economics one conventional common sense about exchange rates is that exchange rates follow a random walk process for frequencies less than annual, such as daily, weekly, or even monthly. However, exchange rates show some trend, cyclicality, or general history dependence at lower frequencies. In contrast to macroeconomic fundamental analysis at lower frequencies, studies on microstructure approaches to exchange rates focus on the movements in exchange rates at high frequency. In particular, microstructure approaches emphasize how exchange rates respond to order flow, which measures the net transaction pressure between buy and sell forces in the actual FX market. The theoretical frameworks for microstructure approaches to exchange rates have been sequentially built by Lyons [1] and Evans and Lyons [2]. In particular, the portfolio-shift model proposed by Evans and Lyons [2] is initially set up in a customer-dealer trading environment to show how order flow impacts exchange rates. Evans and Lyons apply the trading model to daily data obtained from the customer-dealer transaction platform Reuters D2000-1 to examine the exchange rate Deutsche mark/US dollar and Japanese yen/US dollar over May 1 to August 31, 1996. As a result, Evans and Lyons find that order flow can be a good series to determine the exchange rate movement at daily frequency. Similarly, empirical studies have applied this theoretical framework to various high-frequency data from diverse interdealer trading platforms. Killeen et al. [3] study the daily exchange rate German mark/French franc traded on the electronic broking system (EBS) in 1998. Hau et al. [4] study EBS data over 1998 to 1999 on the exchange rate German mark against US dollar. Berger et al. [5] study the intraday EBS data on the exchange rate US dollar/Japanese yen and Euro/US dollar spanning over January 1999 to February 2004. Ito and Hashimoto [6] study the intraday EBS data on the
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