منابع مشابه
Fiscal policy and real exchange rates
Firms with higher debt relative to its size and negative cash °ows have lower value in the market. Why not the same applies to a currency value of a country? This paper investigates this question and shows empirical evidence that indeed a lower degree of government's ̄scal solvency, represented by higher debt and lower surpluses, implies an real exchange rate depreciation. Empirical results als...
متن کاملChapter 2 . Fiscal Policy , the Variety Effect , and the Real Exchange Rate ∗
This paper explores the effects of government consumption spending in a small open economy both under flexible and fixed exchange rate regimes. Varying price elasticity and the variety effect due to firm entry, are introduced to match the empirical evidences on the small open economy. The main mechanism is that firm entry leads to a higher price elasticity (hence variable markup), and increasin...
متن کاملFiscal Policy and Exchange Rates ∗
This paper examines the dynamics of the nominal exchange rate and fiscal deficits in a continuous time optimising general equilibrium model with finite horizon. It is shown that alternative financing modes of budget deficits imply different patterns of adjustment and that fiscal policy may provide the nominal anchor for the exchange rate. Our major finding is that after a fiscal expansion the r...
متن کاملExchange Rate Policy of Iran
The exchange rate regime in Iran is practically fixed. The Central Bank of Iran (CBI) has committed itself to trying to bring about a particular exchange rate regime to meet two important targets: 1. Sustaining competitiveness of the economy, 2. Acquiring the share of foreign reserves in monetary base in a predetermined level. Since 2001 the share of foreign reserves in monetary base has i...
متن کاملPolicy Time-Inconsistency: A Comparison of Managed Floating Exchange Rate and Controlled Exchange Rate Regimes
Some empirical and theoretical studies have emphasized on fixed exchange rate regime in controlling time inconsistency, while others consider the role of target zone regime as an important factor. Thus there is no general consensus to decide which exchange rate regime may bring about less time-inconsistency. The main purpose of this study is to investigate policy time-inconsistency in exchange ...
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ژورنال
عنوان ژورنال: Macroeconomic Dynamics
سال: 2016
ISSN: 1365-1005,1469-8056
DOI: 10.1017/s1365100515000048