Exchanges Rates, Prices, and Competitiveness
Pages: 160
ISBN: 9788820467203
Edition: 1a edizione 1991
Publisher code: 2000.602
Availability: Limitata
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When the system of flexible exchange rates was adopted in 1973, very few predicted that exchange rates would experience both high short-run variability and wide long-run fluctuations. The concern is often expressed within the economics profession that such characteristics of the current exchange rate system adversely affect levels and variance of domestic prices, patterns of trade, resource allocation, and real economic activity. Yet, the empirical evidence about these effects is only partial and contradictory.
This book presents empirical evidence about the relationship between exchange rate and key economic variables. The question addressed throughout is whether it can be said that exchange rate changes cause other variables, and in what sense. Four chapters address this question with respect to issues that have been prominent in the policy discussion: Have exchange rate changes distorted relative prices in the US? Has the US been deindustrialized as a result of the Dollar appreciation of the early 1980s? Have flexible exchange rates contributed to inflation transmission between US and Europe? Do exchange rate policies have short-and long-run effects on the patterns of trade between developing and developed countries? One chapter, though not calling exchange rate changes into play, addresses the issue of relative price variability in a comparative manner.
Fabio Sdogati holds a Laurea in Political Sciences from the University of Roma, and a Master of Science and a Ph.D. in Economics from the University of Wisconsin-Madison. Presently with the Department of Economics of the Milano Polytechnic, he has been Assistant Professor of Economics at Marquette University, and Jean Monnet Fellow at the European University Institute. His current research interests include theoretical models of exchange rate and relative prices with imperfect competition, and empirical models for the effects of completion of the internal market ('Europe 1992') on trade with developing countries.
Acknowledgements
Introduction
1. Exchange Rate, Prices, and Output: Issues of Temporal Ordering and Causality
1.1 Introduction
1.2 Tests of Temporal Ordering
1.2.1 The Direct Granger Test
1.2.2 Granger-Causality Tested a'la Sims
1.2.3 The Haugh-Pierce Test of Independence
1.3 Results from Causality Tests
1.3.1 Results from Granger Causality
1.3.2 Results from the Haugh-Pierce Tests
1.3.3 Results from the Sims Tests
1.4 Further Tests of Linear Dependence and Feedback
Using Vector Autoregression and Frequency
Decomposition
1.4.1 Statistical Methods
1.4.2 Bivariate Analisys
1.4.3 Tests of Linear Dependence and Feedback Between Vectors of Variables
1.5 Conclusions
2. Effects of the Dollar Appreciation on Manufacturing Employment In the United States, 1981-85
2.1 Introduction
2.2 Effects of Exchange Rates Changes: Existing Models
and Their Empirical Results
2.3 A Counterfactual Scenario for the Assessment of the
Effects of Exchange Rate Changes
2.4 Results of the Empirical Analisys
2.5 Conclusions
3. US-European Inflation and Competitiveness Under Flexible Exchange Rates: Does the European Monetary System Make a Difference ?
3.1 Introduction
3.2 Some Preliminary Evidence on the Strength of Linkages Before and After the EMS Formation
3.3 A Model for the Differential Transmission of Inflation from the US to Europe Due to the Formation of the EMS
3.4 Testing the Hypothesis of Transmission of Inflation Between US and Europe Under Flexible Exchange Rates
3.5 Effects of Bilateral Exchange Rates on European/US Competitiveness
3.6 Conclusions
4. Aggregate and Industry-Level lntercountry Price Variability in Europe
4.1 Introduction
4.2 Existing Models for the Relationship Between Price Variability and Inflation
4.3 Data and Estimation Results
4.4 Conclusions
5. Exchange Rates, Prices, and Competitiveness Between
Developed and Developing Countries
5.1 Introduction
5.2 Indicators for a Taxonomy of Successful Developing Countries
5.3 Exchange Rate, Export Performance and Growth
5.3.1 Effects of Exchange Rate Changes In Theory
5.3.2 Estimated Effects of Exchange Rate Changes
5.4 Long Run Trends of Exports from the NICs to the US and Europe: Descriptive Analysis
5.4.1. Overview of NICS Performance in the Aggregate . .
5.4.2. Trade Flows Over Time, 1967-1987
5.4.3. Evolution of the Commodity Composition of Trade Over Time
5.4.3.1. Commodity Composition of Trade Between NiCs and US,1967-1987
5.4.3.2. Commodity Composition of Trade Between NIC and Europe, 1967-1987
5.5 Long Run Trends of Exports from Nics to US and Europe: Econometric Modelling and Elasticities Estimation
5.5.1 A Model for the Effects of Exchange Rate Changes on Demand for Exports
5.5.2 Empirical Evidence on the Relationship Between Exchange Rate and Aggregate Exports
5.5.3 Issues of Time Patterns of Variability and Direction of Causality
5.5.4 Using Export Demand Functions to Identity Sectors Sensitive to Exchange Rate Changes
5.6 The Effects of Dollar Depreciation on the re-Direction of
NiCs Exports from the US to Europe: Evidence
from Monthly Data, 1984-1988
5.6.1. Exchange Rates and Patterns of Total Exports: the Case of South Korea
5.6.2 Exchange Rates and Merchandise Patterns of Exports from South Korea to the Community
5.7. Conclusions
References
Introduction
1. Exchange Rate, Prices, and Output: Issues of Temporal Ordering and Causality
1.1 Introduction
1.2 Tests of Temporal Ordering
1.2.1 The Direct Granger Test
1.2.2 Granger-Causality Tested a'la Sims
1.2.3 The Haugh-Pierce Test of Independence
1.3 Results from Causality Tests
1.3.1 Results from Granger Causality
1.3.2 Results from the Haugh-Pierce Tests
1.3.3 Results from the Sims Tests
1.4 Further Tests of Linear Dependence and Feedback
Using Vector Autoregression and Frequency
Decomposition
1.4.1 Statistical Methods
1.4.2 Bivariate Analisys
1.4.3 Tests of Linear Dependence and Feedback Between Vectors of Variables
1.5 Conclusions
2. Effects of the Dollar Appreciation on Manufacturing Employment In the United States, 1981-85
2.1 Introduction
2.2 Effects of Exchange Rates Changes: Existing Models
and Their Empirical Results
2.3 A Counterfactual Scenario for the Assessment of the
Effects of Exchange Rate Changes
2.4 Results of the Empirical Analisys
2.5 Conclusions
3. US-European Inflation and Competitiveness Under Flexible Exchange Rates: Does the European Monetary System Make a Difference ?
3.1 Introduction
3.2 Some Preliminary Evidence on the Strength of Linkages Before and After the EMS Formation
3.3 A Model for the Differential Transmission of Inflation from the US to Europe Due to the Formation of the EMS
3.4 Testing the Hypothesis of Transmission of Inflation Between US and Europe Under Flexible Exchange Rates
3.5 Effects of Bilateral Exchange Rates on European/US Competitiveness
3.6 Conclusions
4. Aggregate and Industry-Level lntercountry Price Variability in Europe
4.1 Introduction
4.2 Existing Models for the Relationship Between Price Variability and Inflation
4.3 Data and Estimation Results
4.4 Conclusions
5. Exchange Rates, Prices, and Competitiveness Between
Developed and Developing Countries
5.1 Introduction
5.2 Indicators for a Taxonomy of Successful Developing Countries
5.3 Exchange Rate, Export Performance and Growth
5.3.1 Effects of Exchange Rate Changes In Theory
5.3.2 Estimated Effects of Exchange Rate Changes
5.4 Long Run Trends of Exports from the NICs to the US and Europe: Descriptive Analysis
5.4.1. Overview of NICS Performance in the Aggregate . .
5.4.2. Trade Flows Over Time, 1967-1987
5.4.3. Evolution of the Commodity Composition of Trade Over Time
5.4.3.1. Commodity Composition of Trade Between NiCs and US,1967-1987
5.4.3.2. Commodity Composition of Trade Between NIC and Europe, 1967-1987
5.5 Long Run Trends of Exports from Nics to US and Europe: Econometric Modelling and Elasticities Estimation
5.5.1 A Model for the Effects of Exchange Rate Changes on Demand for Exports
5.5.2 Empirical Evidence on the Relationship Between Exchange Rate and Aggregate Exports
5.5.3 Issues of Time Patterns of Variability and Direction of Causality
5.5.4 Using Export Demand Functions to Identity Sectors Sensitive to Exchange Rate Changes
5.6 The Effects of Dollar Depreciation on the re-Direction of
NiCs Exports from the US to Europe: Evidence
from Monthly Data, 1984-1988
5.6.1. Exchange Rates and Patterns of Total Exports: the Case of South Korea
5.6.2 Exchange Rates and Merchandise Patterns of Exports from South Korea to the Community
5.7. Conclusions
References
Contributors:
Serie: Varie
Subjects: Economic Theory - Monetary Economics - European and International Economy
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