The paper investigates the impact of exchange rates on US foreign direct investment (FDI) flows to a sample of 16 emerging market countries using annual panel data for the period 1990-2002. Three separate exchange rate effects are considered: the...
This paper looks at historical and current frameworks to manage macroeconomic linkages among economies. It considers first the evolving nature of global payments imbalances. It then focuses on the mechanisms of macroeconomic dialogue and cooperation...
This paper analyses the role of exchange rates in the competition for FDI. Based on the assumption that two countries compete for FDI from the same source country, the paper shows explicitly that the relative FDI of one country is determined by the...
This paper proposes a structural VAR model which extends the frameworks of Hoffmaister and Roldós (2001) and Prasad (1999). The model is then used to analyse the sources of China’s trade balance fluctuations in the period of 1985–2000. Efforts are...
We analyse two potential effects arising from regional (and with EU) integration—increased quality of institutions (including the quality of financial institutions) and, economic policies and reduced multilateral exchange rate volatility—in a...
This paper revisits the link between exchange rate regimes and trade in the context of Africa’s exchange rate arrangements. Applying an augmented gravity model that includes measures of currency unions and pegged regimes, the paper compares Africa’s...
The paper determines an analytical framework defining the choice of an optimal exchange rate regime for a typical CFA country. The policymakers behave strategically to decide to adopt alternative exchange rate regime by minimizing their loss function...
This special issue of the Journal of International Development presents the results of a study initiated two years ago by UNU/WIDER on `The impact of the liberalization of the exchange rate and financial markets in sub-Saharan Africa'. The project...
We have now witnessed more than half a decade of relatively heavy capital inflows to a large group of highly heterogeneous developing countries and economies in transition in Asia, Eastern Europe, the Former Soviet Union, Latin America, and parts of...
This paper discusses the process, problems and impacts of the financial sector reform in Indonesia, particularly since the late 1980s. The reform has encouraged a surge in private sector capital inflows to supplement the already high domestic savings...
This paper analyses the rationale of interventions in foreign exchange markets in Sub- Saharan Africa and reviews exchange rate theory and balance of payments management and its application to African countries. It analyses the liberalization of...
In this paper I estimate a non-traditional export performance equation for a panel of 60 developing countries. As an input to the export model, I also estimate a panel regression model of the real exchange rate (RER) for the same countries. The RER...
It is argued that the theoretical literature on dual exchange markets has completely neglected the form of central bank intervention emphasized by the "classics". They advocated neutral intervention where the central bank sells in the capital market...
This paper analyzes the short-term effects of foreign capital flows on aggregate demand in Mexico: their magnitude, transmission channels, and the possible influence of the country’s choice of exchange rate regime. The study is motivated by the...
The management of international reserves remains one of the understudied aspects of the international monetary system. There are now a number of reasons why this should change. On the supply side of the market there is the advent of the euro...
The purpose of this paper is to explore economic and political implications of Europe's Economic and Monetary Union (EMU) for developing countries. In strictly economic terms, influences will be communicated through both trade and financial channels...
Tony Addison The present currency turmoil is both a product and a cause of profound changes now underway in the global economy. Part 1 of this two...
Tony Addison The present currency turmoil is both a symptom and a cause of profound changes now underway in the global economy. In part 1 of this two...
This is an open access title available under the terms of a CC BY-NC-SA 3.0 IGO licence. It is free to read at Oxford Scholarship Online and offered as a free PDF download from OUP and selected open access locations. International financial crises...
Part of Book Resetting the International Monetary (Non)System
Part of Book Resetting the International Monetary (Non)System
This paper analyses in depth the causes of the Mexican peso crisis, so as to learn relevant lessons for similar crisis occurring in other developing or transitional economies. The study follows a relatively chronological order, examining first the...
Four "gaps" or restrictions on capacity growth -- from available saving and foreign exchange, investment demand (with crowding-in of private by public capital formation), and ex ante discrepancies between inflation rates needed on the one hand to...
Since the mid-1970s, Chile's exports have expanded at a fast rate, and the export basket has diversified considerably, away from copper towards other primary commodities and commodity-intensive manufactures. This paper explores the causal factors and...
The impact of aid inflows on relative prices and output is ambiguous. Aid inflows that increase domestic expenditure are likely to cause real exchange rate appreciation, ceteris paribus. However, if this expenditure raises the capital stock in the...
This paper examines how macroeconomic policies can be managed to accommodate a large inflow of foreign aid to combat the HIV/AIDS epidemic and still maintain macroeconomic stability. Because of the daunting scale of this epidemic, funds need to be...
This article studies the currency risk management of multinational companies with investments in Latin American countries. The analysis is centred on episodes of currency or financial shocks, searching into the behaviour of the financial management...
Late 1990, Egypt witnessed major and radical changes in all areas of its national life—political, legal, economic and social—as a reflection of implementing an economic reform programme in order to achieve progress in its economic indicators. This...
by Charles Wyplosz With all the hype in Europe and on financial markets worldwide, what does the birth of the euro mean for the developing and...
by David FieldingMonetary Union in AfricaIn the last ten years, there has been much debate about the economic impact of monetary union, in which...
In 1959 the Netherlands discovered vast natural gas resources in the North Sea. This discovery led to a rapid increase in the country’s national wealth. However in the 1960s the Netherlands experienced an economic crisis. The natural gas reserves...
This chapter revisits the link between exchange rate regimes and trade in the context of Africa’s exchange rate arrangements. Applying an augmented gravity model that includes measures of currency unions and pegged regimes, the paper compares Africa...
There is some scepticism about Korea as role model of development as the Korean model involved a considerable degree of state activism, unacceptable in today’s global environment. This paper propose a ‘capability-based view’ of the country’s catch-up...
Set in the context of the recent theoretical and policy debates on appropriate exchange rate regimes for emerging market economies in a world of free capital mobility, the paper attempts to present the case for an intermediate exchange rate regime...
International aid has an ambiguous effect on the macroeconomy of the recipient country. To the extent that aid raises consumer expenditure, there will be some real exchange rate appreciation and a shift of resources away from traded goods production...
Integration of Latin America into the international economy over the past quarter century has led to faster export growth, but not to faster GDP or productivity growth Contrary to mainstream analysis, under the current market reforms countries have...
Part of Journal Special Issue Symposium on Spatial Inequality in Latin America
This volume consists of 18 essays dedicated to the memory of Carlos Diaz-Alejandro on topics that reflect his interests and contributions to the history and theory of international trade and economic development. The issues covered include historical...
A recent study of 36 sub-Saharan African countries found a positive impact of aid in the absolute majority of these countries. However, for Tanzania and Ghana, two major aid recipients, aid did not seem to have been equally beneficial. This paper...
Part of Journal Special Issue Impact of the Liberalization of the Exchange Rate and Financial Markets in Sub-Saharan Africa
Part of Journal Special Issue Impact of the Liberalization of the Exchange Rate and Financial Markets in Sub-Saharan Africa
Part of Journal Special Issue Impact of the Liberalization of the Exchange Rate and Financial Markets in Sub-Saharan Africa
Part of Journal Special Issue Impact of the Liberalization of the Exchange Rate and Financial Markets in Sub-Saharan Africa
Part of Journal Special Issue Impact of the Liberalization of the Exchange Rate and Financial Markets in Sub-Saharan Africa
Part of Book Financial Development, Institutions, Growth and Poverty Reduction
Part of Book Financial Openness and National Autonomy
This paper analyses the links between the integration into the international economy and development in Latin America over the past quarter century. It argues that external liberalization led to faster export growth but not to faster GDP or...
Part of Journal Special Issue Fragility and Development in Small Island Developing States
This paper argues that relative exchange rates between the host countries of foreign direct investment affect their competition for FDI. Specifically, if the host country currency appreciates against the source country's currency more than that of...
Part of Journal Special Issue FDI, Employment, and Growth in China and India
Part of Journal Special Issue Development Aid
Part of Journal Special Issue Development Aid
The bulk of recent literature on foreign exchange interventions has overlooked the potential interdependencies that may exist between these operations and the conduct of monetary policy. This is the case even under inflation targeting and especially...
During the Asian crisis, intermediate exchange rate regimes vanished. It has been argued that those regimes were no longer useful and only the extremes remained valid. The paper analyses three foreign exchange regimes: Argentina (pegged), Chile (band...
This paper investigates the macroeconomic challenges created by a surge in aid inflows. It develops an analytical framework for examining possible policy responses to increased aid, in terms of absorption and spending of aid—where the central bank...
In this overview we try to explain, first, why funds continued to flow towards emerging economies while fundamentals in host countries had been deteriorating before the Asian crisis (rising external deficit, with a significant liquid component...
China has been running a large trade surplus with the rest of the world, particularly with the USA and EU. This has caused considerable diplomatic tensions and tremendous pressure on the Chinese currency. Existing analytical studies, however, mostly...
We examine the properties of alternative monetary policy rules in response to large aid surges in low-income countries characterized by incomplete capital market integration and currency substitution. Using a dynamic stochastic general equilibrium...
This paper discusses the movement of capital flows to and from the exchange rate regimes and monetary policies of China, India, Brazil, and South Africa (CIBS). Furthermore, we compare the level of financial stability, and the composition and...
This paper provides a historical background to contemporary debates on the international monetary system: their genesis, similarities, and differences of problems it has faced at different times. It looks sequentially at the design of the Bretton...
Part of Book Governing Globalization
Part of Book Financial Openness and National Autonomy
Part of Book Short-Term Capital Flows and Economic Crises
Part of Book From Capital Surges to Drought
Part of Book From Capital Surges to Drought
Part of Book Non-Traditional Export Promotion in Africa
Part of Book Understanding Small-Island Developing States
Part of Book The Impact of EMU on Europe and the Developing Countries
Part of Book Debt, Stabilization and Development
Part of Book Short-Term Capital Flows and Economic Crises
Part of Book Short-Term Capital Flows and Economic Crises
Part of Book Short-Term Capital Flows and Economic Crises
Part of Book Short-Term Capital Flows and Economic Crises
Part of Journal Special Issue Aid Policy and the Macroeconomic Management of Aid
Part of Book Debt, Stabilization and Development
Part of Book Debt, Stabilization and Development
The currency crises that engulfed East Asian economies in 1997 and Mexico in 1994 - and their high development costs - raise a serious concern about the net benefits for developing countries of large flows of potentially reversible short-term...
The volume contains original essays by authors who have worked together to derive lessons for African export prospects from the experiences of some of the more successful developing countries in East Asia and Latin America. They present up-to-date...
Much has been written about EMU, mostly concerning its desirability and whether it will ever come to exist. Now it is here, and likely to stay. The 'next generation' of research on EMU is already under way, and this volume presents a significant...
Part of Book The Impact of EMU on Europe and the Developing Countries
by Jean-Paul Azam Appropriate macroeconomic policies are necessary for African countries to make progress in the fight against poverty. As discussed...
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