fixed exchange rate system that fixes the exchange rate of Hong Kong Dollar and United State Dollar to a ratio of 7.8: 1 Hong Kong Monetary Authority does not need to stable exchange market by controlling the supply and demand of HKD. It can be stabilized by Fixed-linkage System. In the past 15 years‚ Hong Kong interest rates and exchange rates fluctuated in the same trend of the US interest rate and exchange rate. The graphs below show an example of interest rate and exchange rate respectively:
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NBER WORKING PAPER SERIES THE PURCHASING POWER PARITY DEBATE Alan M. Taylor Mark P. Taylor Working Paper 10607 http://www.nber.org/papers/w10607 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge‚ MA 02138 June 2004 Forthcoming in Journal of Economic Perspectives. For their helpful comments we thank‚ without implicating‚ Menzie Chinn‚ Richard Clarida‚ Bradford DeLong‚ Charles Engel‚ James Hines‚ James Lothian‚ Bennett McCallum‚ Michael Melvin‚ Peter Neary‚ Maurice Obstfeld
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The Purchasing Power Parity Puzzle Kenneth Rogoff Journal of Economic Literature‚ Vol. 34‚ No. 2. (Jun.‚ 1996)‚ pp. 647-668. Stable URL: http://links.jstor.org/sici?sici=0022-0515%28199606%2934%3A2%3C647%3ATPPPP%3E2.0.CO%3B2-S Journal of Economic Literature is currently published by American Economic Association. Your use of the JSTOR archive indicates your acceptance of JSTOR ’s Terms and Conditions of Use‚ available at http://www.jstor.org/about/terms.html. JSTOR ’s Terms and Conditions of
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controversy among the economist about the validity of PPP (Purchasing Power Parity) in the long run. The parity reveals that prices in two different economies should be identical to each other when they expressed in terms of the same currency. It is a central building block in the monetary models of exchange rate determination. One of the most common practices‚ to test the validity of PPP is through unit root test of real exchange rate. In this paper unit root test has been done based on the data on Bangladesh
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Markets and Systems Set - 2 Theory and Structure of Interest rates P C Narayan IIMB PCN BFMS L02 1 Loanable Funds theory “Market interest Rate is determined by the factors that control the supply and demand for loanable funds” IIMB PCN BFMS L02 2 1 Demand for Loanable Funds • Household demand for loanable funds – As household income rises‚ so does installment debt – Inverse relationship between demand for lonable funds and interest rate • Business demand for loanable funds – Inverse relationship
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Purchasing Power Parity Analysis Paul Streeten defying Purchasing Power as: “The amount of goods and services bought by a unit of currency. It is therefore the reciprocal of a price index: when prices go up‚ purchasing power falls”. In addition‚ he establishes that Purchasing Power Parity (PPP) is the theory that exchange rates between currencies are determined‚ in equilibrium or in the long run‚ by the amount of goods and services that a currency can buy. If £1 in Britain buys what $1.50 buys in
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Gender parity and equal representation in both houses of Congress is still a vexing issue that dates back to the founding of the Republic. Even with the ratification of the 20th amendment in 1920; women are still disproportionately represented in Congress. The vast majority of seats in state legislatures‚ governorships‚ mayoral offices‚ and of course Congress are held by men. Fox and Lawless stated that women fare just as well as men in fundraising and vote totals. But despite this supposed lack
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INFLATION RATE AND INTEREST RATE ON REAL GROSS DOMESTIC PRODUCT OF INDIA | Original or Revised Write-up: | ORIGINAL | Group Number: | 8 | Contact No. and email of Group Coordinator: | 9999864740ft13himanshuarora@imt.ac.in | Group Members: | Sl. | Roll No. | Name | | 1 | 1301-528 | HIMANSHU ARORA | | 2 | 1301-058 | CHITTRESH DHAWAN | | 3 | 1301-333 | DEEP DAGA | | 4 | 1301-137 | NIKHIL SINGHVI | | 5 | 1301-423 | SWATI SINGHAL | The Impact of Inflation Rate and Interest Rate
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of one nation for that of another nation. A foreign exchange market sets the price of one currency in terms of the other; a price termed the foreign exchange rate‚ or simply exchange rate’ (www.amosweb.com/cgi-bin). Factors that influence foreign exchange rates are the balance of trade‚ inflation rate and the prevailing real exchange rates. Where a country experiences a trade deficit‚ which is more imports than exports; its currency will lose value as it means it sells more of its currency to get
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Category – I Authorised Dealer Banks Madam / Sir‚ July 01‚ 2011 Master Circular on External Commercial Borrowings and Trade Credits External Commercial Borrowings and Trade Credits availed of by residents are governed by clause (d) of sub-section 3 of section 6 of the Foreign Exchange Management Act‚ 1999 read with Notification No. FEMA 3/ 2000-RB viz. Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations‚ 2000‚ dated May 3‚ 2000‚ as amended from time to time. 2. This
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