Exchange Rate Second Round Effects And Inflation Processes

Author : Eliphas Ndou,Nombulelo Gumata,Mthokozisi Mncedisi Tshuma
Publisher : Springer
Page : 416 pages
File Size : 42,9 Mb
Release : 2019-04-23
Category : Business & Economics
ISBN : 9783030139322

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Exchange Rate, Second Round Effects and Inflation Processes by Eliphas Ndou,Nombulelo Gumata,Mthokozisi Mncedisi Tshuma Pdf

This book focuses on the exchange rate pass-through (ERPT), second round effects and the inflation process in South Africa. The authors demonstrate that magnitudes of the second round effects of the exchange rate depreciation and oil price shocks depend on inflation regimes. The impact of positive oil price shocks on inflation is weakened by monetary policy credibility. Evidence shows the influence of oil price on unit labour costs and correlation between exchange rate changes and inflation has weakened. In addition, ERPT is reduced by low business and consumer confidence, high trade openness, low inflation and high exchange rate volatility which weaken real economic activity. Both monetary and fiscal policy credibility lowers the sizes of ERPT to inflation and inflation expectations. Fiscal policy via fuel levies, administered prices and public transport inflation channel impacts the responses of monetary policy to inflation shocks. The authors show that second round effects contribute very little to wage inflation following an exchange rate depreciation shock. Both lending rate and household consumption responds asymmetrical to repo rate changes. This book will appeal to policymakers, students, academics and analysts.

Author : Mr.Fabio Scacciavillani
Publisher : International Monetary Fund
Page : 21 pages
File Size : 48,6 Mb
Release : 1995-11-01
Category : Business & Economics
ISBN : 9781451853414

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Exchange Rate Movements, Inflation Expectations, and Currency Substitution in Turkey by Mr.Fabio Scacciavillani Pdf

This paper contains an empirical analysis of currency substitution in Turkey: a simple relationship between the share of foreign currency holdings in M2X on one side and movements in the exchange rate or inflation on the other is derived from a two-stage portfolio choice model. This relationship is estimated by band spectrum regression which allows to remove from the data the short-term cyclical components. The results show that the relationship between currency substitution depends mainly on long-term movements in the exchange rate, while the effect of inflation on currency substitution is not statistically significant.

Author : Jongrim Ha,M. Ayhan Kose,Franziska Ohnsorge
Publisher : World Bank Publications
Page : 513 pages
File Size : 53,6 Mb
Release : 2019-02-24
Category : Business & Economics
ISBN : 9781464813764

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Inflation in Emerging and Developing Economies by Jongrim Ha,M. Ayhan Kose,Franziska Ohnsorge Pdf

This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.

Author : Mr. Marco Airaudo
Publisher : International Monetary Fund
Page : 65 pages
File Size : 46,6 Mb
Release : 2016-03-08
Category : Business & Economics
ISBN : 9781475523164

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Inflation Targeting and Exchange Rate Management In Less Developed Countries by Mr. Marco Airaudo Pdf

We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic and foreign financial assets. Our central finding is that management of the exchange rate greatly enhances the efficacy of inflation targeting. In a flexible exchange rate system, inflation targeting incurs a high risk of indeterminacy where macroeconomic fluctuations can be driven by self-fulfilling expectations. Moreover, small inflation shocks may escalate into much larger increases in inflation ex post. Both problems disappear when the central bank leans heavily against the wind in a managed float.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 34 pages
File Size : 45,9 Mb
Release : 2021-05-06
Category : Business & Economics
ISBN : 9781513573694

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An Empirical Assessment of the Exchange Rate Pass-through in Mozambique by International Monetary Fund Pdf

Determining the magnitude and speed of the exchange rate passthrough (ERPT) to inflation has been of paramount importance for policy-makers in developed and emerging economies. This paper estimates the exchange rate passthrough in Mozambique using econometric techniques on a sample spanning from 2001 to 2019. Results suggest that the ERPT is assymetric, sizable and fast, with 50 percent of the exchange rate variations passing through to prices in less than six months. Policy-makers should continue to pursue low and stable inflation and develop a strong track record of prudent macroeconomic policies for the ERPT to decline.

Author : Nombulelo Gumata,Eliphas Ndou
Publisher : Springer Nature
Page : 556 pages
File Size : 41,8 Mb
Release : 2021-05-27
Category : Business & Economics
ISBN : 9783030663407

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Achieving Price, Financial and Macro-Economic Stability in South Africa by Nombulelo Gumata,Eliphas Ndou Pdf

This book explores the macro-financial effects of central bank balance sheets, macro-prudential tools, and financial regulation in South Africa. How employment can be maximised while keeping inflation low and stable is examined in relation to the structural changes required to alter the composition of South African bank balance sheets. Quantitative methods and approaches are utilised to highlight the impact of suggested policies. This book aims to outline strategies and policy interventions that can help achieve the National Development Plan in South Africa. It will be of interest to researchers and policymakers working within development economics, African economics, development finance, and financial policy.

Author : Ronald MacDonald
Publisher : Routledge
Page : 334 pages
File Size : 43,6 Mb
Release : 2005
Category : Foreign exchange
ISBN : 9781134838226

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Exchange Rate Economics by Ronald MacDonald Pdf

''In summary, the book is valuable as a textbook both at the advanced undergraduate level and at the graduate level. It is also very useful for the economist who wants to be brought up-to-date on theoretical and empirical research on exchange rate behaviour.'' ""Journal of International Economics""

Author : Banco de Pagos Internacionales (Basilea, Suiza). Departamento Monetario y Económico
Publisher : Unknown
Page : 0 pages
File Size : 41,7 Mb
Release : 2013
Category : Banks and banking, Central
ISBN : 9291319627

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Market Volatility and Foreign Exchange Intervention in EMEs by Banco de Pagos Internacionales (Basilea, Suiza). Departamento Monetario y Económico Pdf

Author : Anonim
Publisher : "la Caixa"
Page : 54 pages
File Size : 43,8 Mb
Release : 2024-06-27
Category : Electronic
ISBN : 8210379456XXX

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Inflation Differentials in a Currency Union: A DSGE Perspective by Anonim Pdf

Author : Mrs.Esther Perez Ruiz
Publisher : International Monetary Fund
Page : 33 pages
File Size : 54,5 Mb
Release : 2016-09-07
Category : Business & Economics
ISBN : 9781475533880

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Outside the Band by Mrs.Esther Perez Ruiz Pdf

This paper examines inflation dynamics in Chile during the last peso depreciation episode 2013-15. The evidence is for substantial pass-through effects to inflation, given the large and persistent depreciation movement. Widespread indexation practices in non-traded goods markets are found to amplify the inflation response to the depreciation, while the role of wage indexation is less relevant to the inflation dynamics. Overall, inflation would have remained within the central bank’s target band absent the peso depreciation. The analysis also shows that tightening monetary policy in response to a depreciation shock can be costly in terms of output: the response of activity to rates is found to be strong, while the transmission from activity to inflation is found to be weak. Simulations under uncertainty about the extent of the pass-through also suggest that monetary policy can play a countercyclical role in the face of depreciation shocks at a moderate inflationary cost, as long as inflation expectations remain anchored.

Author : Peter J. N. Sinclair
Publisher : Routledge
Page : 402 pages
File Size : 47,8 Mb
Release : 2009-12-16
Category : Business & Economics
ISBN : 9781135179779

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Inflation Expectations by Peter J. N. Sinclair Pdf

Inflation is regarded by the many as a menace that damages business and can only make life worse for households. Keeping it low depends critically on ensuring that firms and workers expect it to be low. So expectations of inflation are a key influence on national economic welfare. This collection pulls together a galaxy of world experts (including Roy Batchelor, Richard Curtin and Staffan Linden) on inflation expectations to debate different aspects of the issues involved. The main focus of the volume is on likely inflation developments. A number of factors have led practitioners and academic observers of monetary policy to place increasing emphasis recently on inflation expectations. One is the spread of inflation targeting, invented in New Zealand over 15 years ago, but now encompassing many important economies including Brazil, Canada, Israel and Great Britain. Even more significantly, the European Central Bank, the Bank of Japan and the United States Federal Bank are the leading members of another group of monetary institutions all considering or implementing moves in the same direction. A second is the large reduction in actual inflation that has been observed in most countries over the past decade or so. These considerations underscore the critical – and largely underrecognized - importance of inflation expectations. They emphasize the importance of the issues, and the great need for a volume that offers a clear, systematic treatment of them. This book, under the steely editorship of Peter Sinclair, should prove very important for policy makers and monetary economists alike.

Author : International Monetary Fund. Western Hemisphere Dept.
Publisher : International Monetary Fund
Page : 78 pages
File Size : 46,5 Mb
Release : 2014-02-10
Category : Business & Economics
ISBN : 9781475550528

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Bolivia by International Monetary Fund. Western Hemisphere Dept. Pdf

This 2013 Article IV Consultation highlights that good macroeconomic performance and active social policies since the mid-2000s have helped Bolivia to nearly triple income per capita and reduce poverty. The economy benefited from high international commodity prices and rising volumes of natural gas exports. Coupled with twin surpluses in the fiscal and external accounts, net international reserves have increased to almost 50 percent of GDP. Real GDP growth is projected at 6.7 percent in 2013, the highest growth rate of the last 30 years, supported by soaring hydrocarbon exports, strong private consumption, and accommodative macroeconomic policies.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 83 pages
File Size : 41,9 Mb
Release : 2012-01-26
Category : Business & Economics
ISBN : 9781463934514

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Rwanda by International Monetary Fund Pdf

This paper presents key findings of the Third Review under the Policy Support Instrument (PSI) in Rwanda. Program performance was broadly satisfactory. All end-June quantitative assessment criteria were met. Structural benchmarks were partially met as the pace of implementation of structural benchmarks has slowed somewhat either owing to technical difficulties or capacity bottlenecks. Fiscal consolidation in FY2011/12 and FY2012/13 remains on track and is expected to further anchor macroeconomic stability. The authorities have introduced additional revenue measures for FY2012/13 to preserve the revenue objective of the PSI.

Author : International Monetary Fund. Middle East and Central Asia Dept.
Publisher : International Monetary Fund
Page : 127 pages
File Size : 52,9 Mb
Release : 2019-06-05
Category : Business & Economics
ISBN : 9781498318563

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Republic of Armenia by International Monetary Fund. Middle East and Central Asia Dept. Pdf

This paper presents Armenia’s 2019 Article IV Consultation report and request for a Stand-By Arrangement (SBA). The arrangement is intended to be precautionary. It will provide insurance against external shocks and support the authorities’ efforts to strengthen economic fundamentals and policy frameworks. It will also help effective implementation of structural reforms, particularly relating to governance and improving business climate. Discussions focused on macroeconomic and structural policies to ensure macro and fiscal sustainability, foster higher and more broad-based growth, and strengthen resilience to shocks. Supported by the upgraded fiscal rule, fiscal consolidation remains on track, and public debt has started to decline. Inflation is under control, the financial system remains stable, and pressures on the exchange rate have been limited. The authorities’ efforts are centered on advancing structural reforms to generate higher, more inclusive, and resilient growth; and strong policies to maintain macroeconomic stability.

Author : Rudiger Dornbusch
Publisher : MIT Press
Page : 490 pages
File Size : 47,6 Mb
Release : 1988
Category : Business & Economics
ISBN : 0262540606

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Exchange Rates and Inflation by Rudiger Dornbusch Pdf

Collected for the first time in Exchange Rates and Inflation, twenty-two articles are gathered in four parts covering exchange rate theory, special topics in exchange rate economics, equilibrium real exchange rates, and inflation and stabilization.