منابع مشابه
Fiscal 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 کاملChina’s Exchange Rate Policy and Asian Trade
This paper shows empirically that China’s trade balance is sensitive to fluctuations in the real effective exchange rate of the renminbi. However, the current size of the trade surplus is such that exchange rate policy alone will probably not be able to address the imbalance. The potential reduction in the trade surplus resulting from an increase in the renminbi exchange rate is limited mainly ...
متن کاملFiscal 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 کاملWages, Flexible Exchange Rates, and Macroeconomic Policy*
In an open economy with a floaLing exchange rate, the efficacy of fiscal and monetary policy depends fundamentally on the wage-setting pnxiess. In the canonical models of Mundell and Fleming, monetary expansion raises output via an exchange rate depreciation, while fiscal expansion has no output effect. These results hold only when real wages can be altered by exchange rate movements; if the re...
متن کاملExchange Rates and the Working Capital Channel of Trade Fluctuations
Global value chains (GVCs) figure prominently in global trade and lie at the intersection of two important themes. The first is the financing requirement for working capital. The second is the prevalence of dollar invoicing in global trade. The upshot of the interaction of these two themes is that the dollar exchange rate emerges as a determinant of GVC activity. Specifically, a stronger dollar...
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ژورنال
عنوان ژورنال: Intereconomics
سال: 1979
ISSN: 0020-5346,1613-964X
DOI: 10.1007/bf02924565