DETERMINANTS OF EXCHANGE RATE FLUCTUATIONS FOR VENEZUELA: APPLICATION OF AN EXTENDED MUNDELL-FLEMING MODEL HSING‚ Yu* Abstract Applying and extending the Mundell-Fleming model‚ this study attempts to examine the behavior of short-term real exchange rates for Venezuela. It finds that the real effective exchange rate is positively associated with real government deficit spending and negatively influenced by real M2‚ the world interest rate‚ county risk‚ and the expected inflation rate. Hence‚ the
Premium Inflation Monetary policy Foreign exchange market
Exchange rate policy The exchange rate of an economy affects aggregate demand through its effect on export and import prices‚ and policy makers may exploit this connection. Deliberately altering exchange rates to influence the macro-economic environment may be regarded as a type of monetary policy. Changes in exchanges rates initially work there way into an economy via their effect on prices. For example‚ if £1 exchanges for $1.50 on the foreign exchange market‚ a UK product selling for £10 in
Premium Inflation International trade
Introduction – Determinants of Exchange rate ................................................................................. 3 2 Research papers .............................................................................................................................. 4 2.1 Paper -1: Determinants of Exchange Rate Movements ............................................................. 4 2.2 Paper -2: Macroeconomic Determinants of Real Exchange Rates ............................
Premium Inflation Exchange rate Purchasing power parity
The CFO can forecast exchange rates by using either of two approaches‚ fundamental forecasting or technical forecasting. Fundamental forecasting uses trends in economic variables to predict future rates. The data can be plugged into an econometric model or evaluated on a more subjective basis. Technical forecasting uses past trends in exchange rates themselves to spot future trends in rates. Technical forecasters‚ or chartists‚ assume that if current exchange rates reflect all facts in the market
Premium Currency United States dollar Money
neither fixed nor flexible exchange rate system. China has announced in 2005 the “end of its firm peg against the dollar‚ instead allowing it to trade within a narrow band against a basket of currencies.” China regime is managed floating system where the currency increases very slowly year by year and the China government prevent the currency from changing quickly in the short term. The reason why Chinese government intervene in the currency market is to lower exchange rate to increase employment‚
Premium Foreign exchange market Bretton Woods system United States dollar
How is China’s exchange rate policy linked to its development strategy? How would changes in exchange rate policy impact growth in China as well as the rest of the world? Is the current exchange rate policy sustainable in the long run? China’s Policy is to attain a sustainable growth‚ by integrating more and more with world economy or in other words to become a rich economy‚ while generating employment to cater the growing workforce surplus in the country. It the current economic scenario exports
Premium International trade Inflation Economics
the public‚ can professional citizens‚ students and even to parents as long as they avail there selves of using cell phone. This time in order to distinguished and identified some reasons and proven thoughts with regards to the advantages and disadvantages‚ benefits and effect of cell phone exploit. With this study conducted‚ the
Premium Mobile phone Cellular network
BIDS-PRP WORKING PAPER SERIES Exchange Rate Policy under Floating Regime in Bangladesh An Assessment and Strategic Policy Options Working Paper No. 2 Monzur Hossain * Mansur Ahmed∗∗ October‚ 2009 * Research Fellow‚ Bangladesh Institute of Development Studies (BIDS) ∗∗ Research Associate‚ Bangladesh Institute of Development Studies (BIDS) BIDS-PRP WORKING PAPER SERIES Working Paper No. 2 EXCHANGE RATE POLICY UNDER FLOATING REGIME IN BANGLADESH: AN ASSESSMENT AND STRATEGIC POLICY OPTIONS
Premium Foreign exchange market Inflation Monetary policy
Why are floating rates considered to be superior to fixed rates in dealing with major shocks such as oil price increases? Explain why floating exchange rates did not produce a reduction in the US balance of payments deficit during the early 1980s? Describe the system that was developed to replace floating exchange rates. First we need to explain what fixed and floating exchange rates are. Fixed exchange rate regime is a regime in which central banks buy and sell their own currencies to keep
Premium Foreign exchange market Bretton Woods system
The song ”Float On” by Modest Mouse has changed how I feel about my surroundings. It made me realize that I am just one small part in a bigger world. The piece begins with the line‚ “I backed my car into a cop car the other day. Well he just drove off sometimes life’s okay”. This line uses the listener’s previous knowledge of how cops react to accidents to show how sometimes people can surprise you. When people do the unexpected they can change your life for the better. It’s actually my favorite
Premium Modest Mouse Forgiveness 2006 singles