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Monday, July 27, 2020 | History

2 edition of Fiscal adjustment and the real exchange rate found in the catalog.

Fiscal adjustment and the real exchange rate

K. M. Matin

Fiscal adjustment and the real exchange rate

the case of Bangladesh

by K. M. Matin

  • 220 Want to read
  • 17 Currently reading

Published by Country Economic Dept., World Bank in Washington, DC (1818 H St. NW Washington 20433) .
Written in English

    Places:
  • Bangladesh
    • Subjects:
    • Government spending policy -- Bangladesh -- Mathematical models.,
    • Fiscal policy -- Bangladesh -- Mathematical models.,
    • Foreign exchange.

    • Edition Notes

      StatementKazi M. Matin.
      SeriesPolicy research working papers ;, WPS 850
      Classifications
      LC ClassificationsHG3881.5.W57 P63 no. 850
      The Physical Object
      Pagination42 p. :
      Number of Pages42
      ID Numbers
      Open LibraryOL1034624M
      LC Control Number93229113

      Based on papers presented at the 44th Congress of the international Institute of Public Finance, this book, edited by Vito Tanzi, deals with public finance and macroeconomic policy in open, developing economies, with case studies of Chile, Mexico, Turkey, Korea, and the Arab oil exporting countries. M.B. Devereux and D.D. Purvis, Fiscal policy and the real exchange rate balances', where the effect of real depreciation on real income is taken into account. If the income elasticity of money demand is less than (greater than, equal to) nominal depreciation will increase (reduce, leave unchanged) excess supply of Cited by:

      In a small open economy: An expansionary fiscal policy abroad leads to a trade surplus. e.g. when the foreign Governments (US) increase their Government purchases; the effect of Government purchase on home country (e.g. India) trade balance will depend on whether these foreign countries are a small part or a large part of the world economy. The main message of the Mundell-Fleming model is that the effect of any economic policy (fiscal, monetary or trade) depends on the exchange rate system of the country under consideration, i.e., whether the country is following a fixed or a floating exchange rate system. Table summarises the effects of three different policies in the.

      An exchange rate is the rate at which one currency may be converted into another, also called rate of exchange of foreign exchange rate or currency exchange rate. Below are government and external resources that provide currency exchange rates. Note: The exchange rates referenced on this page do not apply when making payments of U.S. taxes to. adjustment in a fixed exchange-rate system. With exchange rates fixed, the option of changing relative prices quickly via nominal exchange rate changes is not available. Hence, real exchange-rate adjustments, when needed, must be achieved through changes in relative costs and prices. However, if wages and prices are not flexible.


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Fiscal adjustment and the real exchange rate by K. M. Matin Download PDF EPUB FB2

Downloadable. The author examines the effect of fiscal adjustment on the real exchange rate. The argument is made that the direction and extent of that effect depends on the way fiscal adjustment is carried out. If a fiscal deficit is reduced mainly by reducing total government spending, the effect on the real exchange rate depends on whether the adjustment is achieved through proportionate.

Get this from a library. Fiscal adjustment, the real exchange rate and Australia's external imbalance. [Alberto Alesina; David W R Gruen; Matthew Jones; Australian National University. Centre for Economic Policy Research.].

Government spending on infrastructure has recently increased sharply in many emerging-market economies. This paper examines the mechanism through which public infrastructure spending affects the dynamics of the real exchange rate.

Using a two-sector dependent open economy model with intersectoral adjustment costs, we show that government spending generates a non-monotonic U Cited by: 1. Fiscal Policy and the Real Exchange Rate. Prepared by. Keywords: Fiscal policy, public investment, consumption, real exchange rate, intersectoral the adjustment of the real exchange rate: –rst, since public infrastructure is accumulated gradually over time, the short run resource withdrawal e⁄ects described above in (1) must File Size: 2MB.

real exchange rate: 1. The nominal exchange rate adjusted for inflation. Unlike most other real variables, this adjustment requires accounting for price levels in two currencies. The real exchange rate is: R = EP*/P where E is the nominal domestic-currency price of foreign currency, P is the domestic price level, and P* is the foreign price level.

"Fiscal Adjustment, The Real Exchange Rate and Australia's External Imbalance," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 24(3), pagesJuly. External debt, fiscal policy, and sustainable growth in Turkey (English) Abstract.

Policy-makers in developing countries who try to reduce external debt are engaged in a complicated balancing act. Domestic spending programs could be curtailed to free up funds for the repayment of debt. If less money is invested in industry and infrastructure Cited by: adjustment of the real exchange rate,6 (iii) government spending in the form of investment in public infrastructure and a subsidy that reduces the cost of intersectoral capital mobility, 7 and (iv) the use of both distortionary and non-distortionary sources of –nancing governmentCited by: 5.

The next equation reflects this concept: Here, RER, P E, and P US indicate the real exchange rate, the price of the Euro-zone’s consumption basket, and the price of the U.S.

consumption basket, respectively. Consider a numerical example for the RER. Assume that the dollar–euro exchange rate is $ per euro, P E (the price of the Euro-zone’s consumption basket) is €, and P US (the.

Vol. 9 No. 3 Fiscal Shocks and the Real Exchange Rate 3 rate is likely to differ across categories. In particular, the compo-sition of spending between tradables and non-tradables may differ between public investment and public consumption and between the wage and non-wage components of the latter category (see, amongst.

Real Exchange Rates, Devaluation, and Adjustment provides a unified theoretical and empirical investigation of exchange rate policy and performance in scores of developing countries.

It develops a theory of equilibrium and disequilibrium real exchange rates, takes up the question of why devaluations are the most controversial policy measures in poorer nations, and discusses what determines.

Using a post Keynesian model, this study aims to analyze the stabilizing role of fiscal and monetary policies in an open economy with a managed exchange rate regime. The real exchange rate is.

Expansionary Fiscal Policy. Suppose the economy is originally at a superequilibrium shown as point J in Figure "Expansionary Fiscal Policy in the AA-DD Model with Floating Exchange Rates".The original gross national product (GNP) level is Y 1 and the exchange rate is E $/£suppose the government decides to increase government spending (or increase transfer payments or decrease.

Chapter pages in book: (p. 13 - 78) 1 The Theory of Exchange Rate Determination an appropriately specified adjustment rule for the domestic money price of and the real exchange rate.

The model illustrates the phenomenon of exchange rate “overshooting” in response to monetary dis- turbances and the role of such disturbances in Cited by: required degree of fiscal adjustment and change in the real exchange rate and, at a more disaggregated level, on output levels in different export-oriented and import-substituting sectors of the.

The real exchange rate depreciates significantly by 3 percent in advanced countries, but it appreciates by over 4 percent in developing countries.

Consumption increases with government spending in developing countries, but the effect of government spending on consumption is negative and statistically insignificant in developed countries.

The Effects of Commercial, Fiscal, Monetary, and Exchange Rate Policies on the Real Exchange Rate Michael L. Mussa. Chapter in NBER book Economic Adjustment and Exchange Rates in Developing Countries (), Sebastian Edwards and Liaquat Ahamed, editors (p.

43 - 88) Published in by University of Chicago PressCited by: I. Stabilization, Adjustment, and Exchange Rate Policy in Developing Countries 1. Exchange Rate Management and Stabilization Policies in Developing Countries Sweder van Wijnbergen Comment: James A.

Hanson 2. The Effects of Commercial, Fiscal, Monetary, and Exchange Rate Policies on the Real Exchange Rate Michael Mussa Comment: Jeffrey A. Frankel. evolution of the real exchange rate reflects inflation differentials vis-à-vis other countries. Since fiscal policy is the main tool of stabilisation policy available to individual countries in a monetary union, the links between fiscal policy and the real exchange rate become particularly relevant.

However, although there is. Expansionary Fiscal Policy. Suppose the economy is originally at a superequilibrium shown as point J in Figure "Expansionary Fiscal Policy in the AA-DD Model with Floating Exchange Rates".The original gross national product (GNP) level is \(Y^{1}\) and the exchange rate is \(E_{$/£}^{1}\).Next, suppose the government decides to increase government spending (or increase.

Fiscal Shocks and the Real Exchange Rate. by Agustín S. Bénétrix a and Philip R. Lane a,b. Abstract. We estimate the real exchange rate impact of shocks to government spending for a panel of member countries of the euro area.

Our key finding is that the impact differs across different types of government spending, with shocks to public.The pamphlet (which updates the Guidelines for Fiscal Adjustment) presents the IMF's approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth.

Structured around five practical questions-when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and.Boom, crisis, and adjustment: the macroeconomic experience of developing countries, - a summary (English) Abstract.

This publication is a summary of the full book which reviews the macroeconomic experiences of eighteen developing countries and looks at the interplay between politics and economics and motivations for economic policies.