China's Exchange Rate Policy: A Survey of the Literature Staff Discussion Paper 2008-5 Robert Lafrance China's integration into the world economy has benefited its people by reducing poverty and raising living standards, and it has benefited the industrialized world by producing manufactured goods at lower cost. It has also raised geopolitical concerns as China's power grows, economic concerns as the manufacturing base in many industrialized countries erodes, and polemics as proposals of protectionist measures to counter China's export growth are put forward. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Exchange rate regimes JEL Code(s): F, F3, F33, F36
Sterilized Intervention in Emerging-Market Economies: Trends, Costs, and Risks Staff Discussion Paper 2008-4 Robert Lavigne The author examines recent trends in sterilized intervention among emerging-market economies, to determine the size and extent of this policy in relation to earlier periods of heavy reserve accumulation. He then analyzes whether the domestic costs and risks of substantial and prolonged sterilization are beginning to manifest themselves. Content Type(s): Staff research, Staff discussion papers Research Topic(s): Exchange rate regimes, Financial stability, International topics JEL Code(s): E, E5, E52, F, F3, F31, O, O2, O24
Welfare Effects of Commodity Price and Exchange Rate Volatilities in a Multi-Sector Small Open Economy Model Staff Working Paper 2008-8 Ali Dib This paper develops a multi-sector New Keynesian model of a small open economy that includes commodity, manufacturing, non-tradable, and import sectors. Price and wage rigidities are sector specific, modelled à la Calvo-Yun style contracts. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Exchange rate regimes, International topics JEL Code(s): E, E4, E5, E52, F, F3, F4
A Wave of Protectionism? An Analysis of Economic and Political Considerations Staff Working Paper 2008-2 Philipp Maier In light of the U.S. current account deficit, pressure is high on Asian countries to revalue their currencies. The calls from some U.S. policymakers for tariffs on imports from China has sparked fears that this could trigger a world-wide surge in protectionism. Content Type(s): Staff research, Staff working papers Research Topic(s): International topics, Recent economic and financial developments, Regional economic developments JEL Code(s): E, E6, E66, F, F3, F32, F4, F47
The Carry Trade, Portfolio Diversification, and the Adjustment of the Japanese Yen Staff Discussion Paper 2008-2 Corinne Luu In this paper, the author considers whether fundamentals or other factors can explain the yen's ongoing weakness. In particular, the importance of capital outflows due to the carry trade and longer-term portfolio investment outflows, which may be delaying the adjustment of the yen, are investigated. A simple portfolio model is developed, composed of a speculative […] Content Type(s): Staff research, Staff discussion papers Research Topic(s): Exchange rates, International topics, Recent economic and financial developments JEL Code(s): F, F2, F21, F3, F31, F32, G, G1, G11
Expenditure-Switching Effect and the Choice of Exchange Rate Regime Staff Working Paper 2007-54 Wei Dong The author investigates the quantitative importance of the expenditure-switching effect by developing and estimating a structural sticky-price model nesting both producer currency pricing (PCP) and local currency pricing (LCP) settings. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rate regimes, International topics JEL Code(s): F, F3, F4
Testing Uncovered Interest Parity: A Continuous-Time Approach Staff Working Paper 2007-53 Antonio Diez de los Rios, Enrique Sentana Nowadays researchers can choose the sampling frequency of exchange rates and interest rates. Content Type(s): Staff research, Staff working papers Research Topic(s): Econometric and statistical methods, Exchange rates JEL Code(s): F, F3, F31, G, G1, G15
Where Does Price Discovery Occur in FX Markets? Staff Working Paper 2007-52 Chris D'Souza Trades in foreign exchange markets are initiated around the world and around the clock. This study illustrates that trades are more informative when initiated in a local country or in major foreign exchange centers like London and New York. Content Type(s): Staff research, Staff working papers Research Topic(s): Exchange rates, Financial markets, Market structure and pricing JEL Code(s): F, F3, F31, G, G1, G15
The Bank of Canada's Version of the Global Economy Model (BoC-GEM) Technical Report No. 98 René Lalonde, Dirk Muir The Bank of Canada's version of the Global Economy Model (BoC-GEM) is derived from the model created at the International Monetary Fund by Douglas Laxton (IMF) and Paolo Pesenti (Federal Reserve Bank of New York and National Bureau of Economic Research). Content Type(s): Staff research, Technical reports Research Topic(s): Business fluctuations and cycles, Economic models, International topics JEL Code(s): C, C6, C68, E, E2, E27, E3, E37, F, F3, F32, F4, F47
Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s: (Hard) Lessons Learned for Monetary Policy in a Small Open Economy Staff Working Paper 2007-45 Michael Bordo, Ali Dib, Lawrence L. Schembri This paper revisits Canada's pioneering experience with floating exchange rate over the period 1950–1962. It examines whether the floating rate was the best option for Canada in the 1950s by developing and estimating a New Keynesian small open economy model of the Canadian economy. Content Type(s): Staff research, Staff working papers Research Topic(s): Economic models, Exchange rates JEL Code(s): E, E3, E32, E37, F, F3, F31, F32, N, N1