Updated 11/27
From today’s Project Syndicate:
Category Archives: exchange rates
The Yen’s Progress and Japanese Exports
I’m just back from Japan, where disappointing GDP statistics have reinforced the fact that the economy is still far from full recovery.
Exchange Rates: What Exactly Are Those “Factors”?
One of the things that mystifies me is a branch of the asset pricing literature which models exchange rates as a function of a “factor” or “factors”. It’s not that I don’t think they make sense, statistically; it’s that my mind wants to know what those “factors” are.
Unconventional Monetary Policy Effects on the Exchange Rate at the ZLB
The descent of interest rates to near zero in the advanced economies has prompted something of a rethink of how monetary policy can affect exchange rates.
“Building U.S. Competitiveness”
The Economic Report of the President, 2013, released last Friday, devotes some attention to global rebalancing, a topic that I’ve addressed on a number of occasions. [1] [2]; and this paper. Exchange rate movements are critical, but so too are productivity and wage movements.
Yen Depreciation and the Scope for Expenditure Switching
With Haruhiko Kuroda ascending to head the Bank of Japan [1], it is likely that monetary policy will remain fairly expansionary. Even without direct intervention in foreign exchange markets, the yen will likely continue to weaken as expectations of inflation rise. What is the likely impact of trade flows?
Quantitative Easing, Intervention, and Currency Wars, Again
Thinking about what is driving — and will drive — the yen
Currency Wars in the Era of Unconventional Monetary Policies
Interpreting Monetary Policy’s Impact on Exchange Rates (and Economic Activity)
Expectations, Uncovered Interest Parity, and the Zero Interest Bound: New Results
One of the most robust findings in international finance is that interest differentials do not point in the right direction for subsequent exchange rate changes. This means that dollar returns on say one year certificates of deposit in the US and in the UK are not on average equalized. In Chinn and Meredith (2004), we show that this anomaly — if it is one — disappears as one goes to longer horizons. This finding was discussed previously here.
Emerging Reserve Currencies?
From the abstract to “A Note on Reserve Currencies
with Special Reference to the G-20 Countries”
It is most likely that the current reserve currencies will retain their status in the near future, given the persistence in the composition of reserve holdings.