Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper focuses on the short-run and long-run supply-side effects of disinflation programs in a two-sector economy. Fixing the exchange rate reduces the wedge between the return on foreign assets and that on domestic capital, leading to an increase in the latter. After an initial real exchange rate appreciation and increase in the production of nontradables—due to a consumption boom—the new capital is gradually installed in the tradable sector. During this transitional period, further real appreciation takes place—as the expansion of the tradable sector pulls labor away from the nontradable sector—together with investment-driven deficits in the current account. We conclude that when appreciation and deficits are due to supply-side rigidities, rather than to credibility and/or price stickiness, no further policies (i.e., capital controls, incomes policies) are advisable.

Currency --- Demand and Supply of Labor: General --- Exports and Imports --- External position --- Financial institutions --- Financial Instruments --- Foreign assets --- Foreign Exchange --- Foreign exchange --- Income economics --- Institutional Investors --- International economics --- International Investment --- Investment & securities --- Investments, Foreign --- Investments: Stocks --- Labor economics --- Labor Economics: General --- Labor market --- Labor supply --- Labor --- Labour --- Long-term Capital Movements --- Macroeconomics --- Non-bank Financial Institutions --- Open Economy Macroeconomics --- Pension Funds --- Real exchange rates --- Stocks --- Russian Federation

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

We study the effects of a credible, gradual exchange rate based disinflation program in a two sector economy. After an initial real exchange rate depreciation, the reductions in the rate of devaluation reduce the monetary wedge generated by a cash in advance constraint, leading to a gradual increase in absorption that yields progressive real exchange rate appreciations and current account deficits. An initial boom in economic activity is not followed by a later contraction, as labor supply expands during the whole length of the program.

Foreign Exchange --- Inflation --- Labor --- Macroeconomics --- Open Economy Macroeconomics --- Macroeconomics: Consumption --- Saving --- Wealth --- Price Level --- Deflation --- Demand and Supply of Labor: General --- Labour --- income economics --- Currency --- Foreign exchange --- Consumption --- Labor supply --- Real exchange rates --- Disinflation --- National accounts --- Prices --- Economics --- Labor market --- United States --- Income economics

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper compares business cycles in Asia and in Latin America using structural vector autoregression analysis with panel data. The evidence for countries in these regions suggests that (i) the main source of output fluctuations is supply shocks, even in the short run; (ii) the real exchange rate is driven mostly by fiscal shocks; and (iii) terms of trade shocks are important for trade balance fluctuations but not for output or real exchange rate fluctuations. However, in Latin America, as opposed to Asia, output is affected more by external and domestic demand shocks.

Exports and Imports --- Foreign Exchange --- Economic Theory --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- Business Fluctuations --- Cycles --- Open Economy Macroeconomics --- Empirical Studies of Trade --- Agriculture: Aggregate Supply and Demand Analysis --- Prices --- Currency --- Foreign exchange --- International economics --- Economic theory & philosophy --- Real exchange rates --- Terms of trade --- Trade balance --- Exchange rates --- Supply shocks --- International trade --- Economic theory --- Economic policy --- nternational cooperation --- Balance of trade --- Supply and demand --- United States --- Nternational cooperation

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

In this paper we explore some of the informational problems that constrain the development of credit markets in transition economies. We characterize investment patterns under uncertainty and high costs of entry, when agents learn about the ultimate value of enterprises through production in a Bayesian way. Inefficiencies due to the lack of public information reduce the average return to capital. Under asymmetric information, credit would go to activities that can provide enough co-finance. Credit markets may fail to develop for a while if there is not enough individual wealth to complement credit. Once they operate, credit markets may magnify distortions in equity markets, such as those due to spontaneous privatization. An argument for the sequencing of capital market liberalization is provided.

Banks --- Credit --- Depository Institutions --- Environment --- Environmental Economics --- Environmental economics --- Environmental Economics: General --- Environmental sciences --- Finance --- Finance: General --- Financial institutions --- Financial Instruments --- Financial markets --- General Financial Markets: General (includes Measurement and Data) --- Industries: Financial Services --- Institutional Investors --- Investment & securities --- Investments: Stocks --- Loans --- Micro Finance Institutions --- Monetary economics --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Money and Monetary Policy --- Money --- Mortgages --- Non-bank Financial Institutions --- Pension Funds --- Stock exchanges --- Stock markets --- Stocks --- Russian Federation

Choose an application

• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

This paper studies changes in Canada's monetary policy transmission, associated with the important changes in financial structure experienced in the 1990's, using two methodologies. First, VAR models show a clear break in monetary transmission beginning in 1988, after changes in financial regulation initiated the process of financial disintermediation. Second, estimates of the interest rate elasticity of aggregate demand in IS equations increase in the 1990's, suggesting that the systematic component of monetary policy has become more relevant. The ratio of direct to indirect finance, a measure of disintermediation, contributes to explain changes in the interest rate elasticity, suggesting an increased effectiveness of monetary policy associated with a larger use of market-based sources of finance.

Capital market -- Canada. --- Electronic books. -- local. --- Finance -- Canada. --- Monetary policy -- Canada. --- Money market -- Canada. --- Finance --- Business & Economics --- International Finance --- Capital market --- Monetary policy --- Money market --- Money markets --- Capital markets --- Market, Capital --- Financial institutions --- Money --- Loans --- Securities --- Crowding out (Economics) --- Efficient market theory --- Corporate Finance --- Econometrics --- Macroeconomics --- Money and Monetary Policy --- Industries: Financial Services --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Price Level --- Inflation --- Deflation --- Corporate Finance and Governance: General --- Econometrics & economic statistics --- Monetary economics --- Ownership & organization of enterprises --- Vector autoregression --- Bank credit --- Asset prices --- Corporate sector --- Credit --- Prices --- Business enterprises --- Canada