Foreign Exchange Intervention and the Dutch Disease - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Foreign Exchange Intervention and the Dutch Disease write by Julia Faltermeier. This book was released on 2017-03-27. Foreign Exchange Intervention and the Dutch Disease available in PDF, EPUB and Kindle. We study the optimal foreign exchange (FX) intervention policy in response to a positive terms of trade shock and associated Dutch disease episode in a small open economy model. We find that during a Dutch disease episode tradable production drops below the socially optimal level, resulting in lower welfare under learningby- doing (LBD) externalities. FX reserves accumulation improves welfare by preventing a large appreciation of the real exchange rate and by inducing an efficient reallocation between the tradable and non-tradable sectors. For an empirically plausible parametrization of LBD externalities, the model predicts that in response to a 10 percent increase in commodity prices FX reserves should increase by 1.5 percent of GDP. We also find that the welfare gains from optimally using FX reserves are twice as high as the gains from relying only on monetary policy. These results suggest that FX intervention is a beneficial policy to counteract the loss of competitiveness during a Dutch disease episode.
Foreign Exchange Intervention and the Dutch Disease
Foreign Exchange Intervention and the Dutch Disease - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Foreign Exchange Intervention and the Dutch Disease write by Julia Faltermeier. This book was released on 2017-03-27. Foreign Exchange Intervention and the Dutch Disease available in PDF, EPUB and Kindle. We study the optimal foreign exchange (FX) intervention policy in response to a positive terms of trade shock and associated Dutch disease episode in a small open economy model. We find that during a Dutch disease episode tradable production drops below the socially optimal level, resulting in lower welfare under learningby- doing (LBD) externalities. FX reserves accumulation improves welfare by preventing a large appreciation of the real exchange rate and by inducing an efficient reallocation between the tradable and non-tradable sectors. For an empirically plausible parametrization of LBD externalities, the model predicts that in response to a 10 percent increase in commodity prices FX reserves should increase by 1.5 percent of GDP. We also find that the welfare gains from optimally using FX reserves are twice as high as the gains from relying only on monetary policy. These results suggest that FX intervention is a beneficial policy to counteract the loss of competitiveness during a Dutch disease episode.
Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease?
Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease? write by Mr.Ruy Lama. This book was released on 2010-08-01. Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease? available in PDF, EPUB and Kindle. This paper evaluates how successful is a policy of exchange rate stabilization to counteract the negative effects of a Dutch Disease episode. We consider a small open economy model that incorporates nominal rigidities and a learning-by-doing externality in the tradable sector. The paper shows that leaning against an appreciated exchange rate can prevent an inefficient loss of tradable output but at the cost of generating a misallocation of resources in other sectors of the economy. The paper also finds that welfare is a decreasing function of exchange rate intervention. These results suggest that stabilizing the nominal exchange rate in response to a Dutch Disease episode is highly distortionary.
Is Exchange Rate Stabilization a+L4510n Appropriate Cure for the Dutch Disease?
Is Exchange Rate Stabilization a+L4510n Appropriate Cure for the Dutch Disease? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Is Exchange Rate Stabilization a+L4510n Appropriate Cure for the Dutch Disease? write by Juan Pablo Medina Guzman. This book was released on 2010-08-01. Is Exchange Rate Stabilization a+L4510n Appropriate Cure for the Dutch Disease? available in PDF, EPUB and Kindle. This paper evaluates how successful is a policy of exchange rate stabilization to counteract the negative effects of a Dutch Disease episode. We consider a small open economy model that incorporates nominal rigidities and a learning-by-doing externality in the tradable sector. The paper shows that leaning against an appreciated exchange rate can prevent an inefficient loss of tradable output but at the cost of generating a misallocation of resources in other sectors of the economy. The paper also finds that welfare is a decreasing function of exchange rate intervention. These results suggest that stabilizing the nominal exchange rate in response to a Dutch Disease episode is highly distortionary.
Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease?
Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease? - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease? write by Ruy Lama. This book was released on 2014. Is Exchange Rate Stabilization an Appropriate Cure for the Dutch Disease? available in PDF, EPUB and Kindle. This paper evaluates how successful is a policy of exchange rate stabilization to counteract the negative effects of a Dutch Disease episode. We consider a small open economy model that incorporates nominal rigidities and a learning-by-doing externality in the tradable sector. The paper shows that leaning against an appreciated exchange rate can prevent an inefficient loss of tradable output but at the cost of generating a misallocation of resources in other sectors of the economy. The paper also finds that welfare is a decreasing function of exchange rate intervention. These results suggest that stabilizing the nominal exchange rate in response to a Dutch Disease episode is highly distortionary.
