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2 edition of International Capital Mobility and Asset Substitutability found in the catalog.

International Capital Mobility and Asset Substitutability

Bank of Canada.

International Capital Mobility and Asset Substitutability

Some Theory and Evidence on Recent Structural Changes.

by Bank of Canada.

  • 208 Want to read
  • 3 Currently reading

Published by s.n in S.l .
Written in English


Edition Notes

1

SeriesBank of Canada. Technical reports -- 44
ContributionsCaramazza, F., Clinton, K., Cote, A.
ID Numbers
Open LibraryOL21940596M

Perfect international capital mobility implies that the interest rate on domestic bonds is equal to the interest rate on foreign bonds plus the forward premium on the exchange rate—that is, covered interest parity; it should be noted that perfect capital mobility is based on the assumption that there is no differential risk of default or of. Renowned researchers Paul Krugman and Maurice Obstfeld set the standard for international economics courses with the text that remains the market leader in the U.S. and around the ational Economics: Theory and Policy is a proven approach in which each half of the book leads with an intuitive introduction to theory and follows with self-contained chapters to cover key policy 3/5(2). Chapter 7: International Investment and Capital Flows: Chapter 8: Prices and Exchange Rates: Purchasing Power Parity perfect capital mobility. the free flow of capital between nations because there are no significant transaction-costs or capital controls. Modern exchange rate models emphasize financial asset markets. James Tobin, Prominent Keynesian macroeconomist and monetary theorist at Yale.. Born and raised in Champaign, Illinois, James Tobin received his principal degrees from Harvard (B.A., , M.A. , Ph.D., ), where he came under the influence of Alvin Hansen, Seymour E. Harris and Joseph still an undergraduate, Tobin read the "new" book causing so much of a.

Summary International Economics - Theory and Policy by Paul R. Krugman Maurice Obstfeld, Marc Melitz Course: Introduction to the Economics of Developing Countries (ECO).


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International Capital Mobility and Asset Substitutability by Bank of Canada. Download PDF EPUB FB2

Get this from a library. International capital mobility and asset substitutability: some theory and evidence on recent structural changes. [Francesco Caramazza;].

Downloadable. This paper presents a long-run model of the open economy in a world of fixed exchange rates and imperfect substitutability between bonds denominated in different currencies. The model explicitly accounts for the wealth flow accompanying current-account imbalance and for the flow of interest payments associated with international lending.

The textbook definition of perfect capital mobility involves perfect substitutability, i.e., an infinite cross-price elasticity of demand between domestic and foreign assets. International capital mobility Perfect substitutability, together with the absence of transactions costs, Cited by: Alexandre Rands Barros, in Roots of Brazilian Relative Economic Backwardness, Perfect Capital Mobility Among Countries.

Capital mobility plays a major role in the whole argument of this book, thus it deserved a whole section in the previous chapter and no further discussion is pursued here.

International Capital Mobility and Asset Substitutability book is worth noting that the second half of the 19th century is normally taken as the golden.

international capital mobility and exchange rate volatility investment correlations as high as one, while the various models that impose purchasing power parity are generally not as able to do so.

Within the case of capital mobility, we consider the importance of the degree of international asset substitutability -- the extent to which individuals respond to differences in anticipated rates Author: Alberto Giovannini.

capital flows to gross domestic financial flows is a useful measure of international capital mobility. By this criterion, capital mobility is rising but remains far less than perfect.

Section I will briefly review the empirical literature on capital mobility and update the net capital flow evidence. () Influence of Fiscal Shocks on Exchange Rate Volatility under Imperfect Capital Mobility and Asset Substitutability.

In: Frisch H., Wörgötter A. (eds) Open-Economy Macroeconomics. International Economic Association : Şaziye Gazioḡlu. Downloadable (with restrictions). This paper presents a long-run model of the open economy in a world of fixed exchange rates and imperfect substitutability between bonds denominated in different currencies.

The model explicitly accounts for the wealth flow accompanying current-account imbalance and for the flow of interest payments associated with international by: Chapter pages in book: (p. - ) 11 Capital Mobility and the Scope for Sterilization: When the exchange rate is pegged and international capital movements are sensitive to interest rate differentials between countries, the capital even under perfect capital mobility and unlimited asset substitutability.

Below, we compute the Cited by: Get this from a library. Savings Promotion, Investment Promotion, and International Competitive- ness. [Barry Eichengreen; Lawrence H Goulder; National Bureau of Economic Research.;] -- In an open economy, savings- and investment-promoting policies may have very different effects on the capital account and on the viability of export-oriented and import-competing industries.

The empirical results indicate income homogeneity, a strong own-rate-of-return effect, a high degree of international capital mobility and asset substitutability, and demonstrate that both domestic and foreign factors are important determinants of inflation in Uganda. "This book deals with the financial side of international economics and covers all aspects of international finance.

There are many books and articles by exponents of alternative points of view. I know of no other book that provides the scope, balance, objectivity and rigor of the book." (Professor Jerome L.

Stein, Brown University) From the reviews: "In this survey of international finance 4/5(3). international mobility (which assumes that there are no International Capital Mobility and Asset Substitutability book to or costs of such transactions).

In the case of capital mobility, we consider the importance of the degree of international asset substitutability. At one extreme is zero substitutability, where households hold domestic and foreign assets in fixed proportions. At the other is Cited by: Perfect Capital Mobility, Perfect Asset Substitutability, and Interest Parity Conditions 60 Appendix 62 Rational Expectations and Efficiency of the Foreign Exchange Market 62 The Peso Problem 63 The Siegel Paradox 64 References 65 5 The Balance of Payments 67File Size: KB.

References.- 17 International capital movements and other problems.- Introduction.- Short-term capital movements and foreign-exchange speculation.- The main types of short-term capital movements.- Flexible exchange rates and speculation.- Long-term capital movements.- The transfer problem.- Introductory 2/5(1).

In Chapter 3 we looked, in some detail, into the relationship between the exchange rate and the current account in a world with perfect capital mobility, imperfect asset substitutability and continuous PPP.

When capital is perfectly mobile internationally the exchange rate enters directly into the modelling of asset markets to equate the stock Author: Emmanuel Pikoulakis.

Portfolio Diversification as a Motive for International Asset Trade; The Menu of International Assets: Debt versus Equity; International Banking and the International Capital Market; The Structure of the International Capital Market; Offshore Banking and Offshore Currency Trading; The Growth of.

"Measuring International Capital Mobility: A Review," American Economic Rev no.2 (May ), To be reprinted in International Financial Integration, edited by Sylvester Eijffinger and Jan Lemmen, Edward Elgar Publishing.

"Chartists, Fundamentalists, and. Caramazza, Francesco, Kevin Clinton, Agathe Cote, and David Langworth. International Capital Mobility and Asset Substitutability: Some Theory and Evidence on Recent Structural Changes. Bank of Canada Technical Report no.

Kasman, Bruce, and Charles Pigott. "Interest Rate Divergences among the Major Nations.". Unformatted text preview: Springer Texts in Business and Economics Giancarlo Gandolfo International Finance and Open-Economy Macroeconomics With contributions by Daniela Federici Second Edition Springer Texts in Business and Economics More information about this series at Giancarlo Gandolfo International Finance and Open-Economy Macroeconomics Second Edition With Contributions by.

The book is divided into trade and finance. Within each half, core theory chapters are followed by a series of application chapters that confront policy questions using the newest empirical work, data, and policy debates.

Coverage of international trade features:; An integrated treatment and empirical evidence of the latest models of trade, such as the gravity, Ricardian, factor endowments.

Central Banks should enjoy a fair degree of autonomy in pursuing price stability to promote long-run growth and prosperity. This volume, edited by Patrick Downes and Reza Vaez-Zadeh, contains the papers presented at the fifth IMF seminar on central banking issues in November The theme was the interdependence of central bank functions and the role of central bank autonomy.

Mundell, Robert, “International Trade and Factor Mobility,” American Economic Review,Junepp. Mussa, Michael and Morris Goldstein, “The Integration of World Capital Markets,” in Changing Capital Markets: Implications for Monetary Policy.

Kansas City, Missouri: Federal Reserve Bank of Kansas City, Nobel Prize winning economist Paul Krugman, renowned researcher Maurice Obstfeld, and new co-author Marc Melitz of Harvard University, continue to set the standard for International Economics courses with the text that remains the market leader in the U.S.

and around the ational Economics: Theory and Policy is a proven approach in which each half of the book leads with an.

The integration of market economies is one of the most remarkable features of international economics, which has important implications for macroeconomic performance in open economies.

Equally important is the declining relevance of the real versus the monetary theory dichotomy. These papers focus.

Interrnacional economics 1. International Economics Theory & Policy 2. The Pearson Series in Economics Abel/Bernanke/Croushore Macroeconomics* Bade/Parkin Foundations of Economics* Berck/Helfand The Economics of the Environment Bierman/Fernandez Game Theory with Economic Applications Blanchard Macroeconomics* Blau/Ferber/Winkler The Economics of Women.

The book is divided into trade and finance. Within each half, core theory chapters are followed by a series of application chapters that confront policy questions using the newest empirical work, data, and policy debates. Coverage of international trade features: ; An integrated treatment and empirical evidence of the latest models of trade, such as the gravity, Ricardian, factor endowments.

Further, (two-way) sterilized intervention-cum-inflation targeting could provide more positive outcomes in the presence of imperfect capital mobility/asset substitutability. In order to analyze the impacts of exchange rate variations on economic activity, the concept of exchange rate pass-through to the consumer prices (ERPT) should be : Oguzhan Ozcelebi.

Understanding international capital flows is highly relevant for policy-makers. Economic theory argues that international capital mobility allows for savings to be channelled towards the countries with more productive investment opportunities and for a better sharing of macroeconomic risk between countries subject to different by: MACROECONOMIC POLICIES AND THE BALANCE OF PAYMENTS: 1 international asset sUbstitutability.

Unlike the portfolio balance model used in Chapter 2, the theoretical models and international capital mobility in general. In their review of recent developments inCited by: 3. The Mundell–Fleming model, also known as the IS-LM-BoP model (or IS-LM-BP model), is an economic model first set forth (independently) by Robert Mundell and Marcus Fleming.

The model is an extension of the IS-LM s the traditional IS-LM model deals with economy under autarky (or a closed economy), the Mundell–Fleming model describes a small open economy. Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors will be indifferent to interest rates available on bank deposits in two countries.

The fact that this condition does not always hold allows for potential opportunities to earn riskless profits from covered interest assumptions central to interest rate parity are capital. on capital mobility, but they remain valid when such mobility exists, so we shall assume capital is completely immobile.” (Mundell [, ]) 1 Every chapter in Mundell’s second theory book, Monetary Theory, takes capital mobility to be zero.

There is a persuasive argument that capital mobility has little to do with some of the. Appendix 1: Equilibrium in the Foreign Exchange Market with Imperfect Asset Substitutability. Appendix 2: The Timing of Balance of Payments Crises.

Part IV. International Macroeconomic Policy Chapter The International Monetary System, – The Interwar Years, – The Bretton Woods System and the International Monetary Fund.

International Labor Mobility In this section, we will show how the specific factors model can be adapted to analyze the effects of labor mobility. In the modern world, restrictions on the flow of labor are legion—just about every country imposes restrictions on immigration.

Thus labor mobility is less prevalent in practice than capital mobility. The model features incomplete markets, imperfect asset substitutability, and nominal rigidities.

In this environment, policymakers can respond to fluctuations in capital flows through capital account policies such as sterilized interventions and taxing capital inflows, in addition to conventional monetary policy.

capital mobility view (which allows imperfect asset substitutability however) comes closer to the truth than the demon spirits views of many old time floating rate critics, but there is good reason to believe that intermediate views need to be explored more carefully.

For example, participants in. There are many books and articles by exponents of alternative points of view. I know of no other book that provides the scope, balance, objectivity and rigor of this book.

the late Professor Jerome L. Stein, Brown University. This book is a second edition of a volume on international finance first published in. Dealing with the Trilemma: Optimal Capital Controls with Fixed Exchange Rates Emmanuel Farhi Iván Werning – It is impossible to have free capital mobility, fixed exchange rate, and independent monetary policy.

by maneuvering taxes on international. International Monetary Policy. STUDY. PLAY. - Capital requirements and asset restrictions, bank examinations - international capital markets must contribute to risk avoidance - an international mix of assets and liabilities minimizes risks--> Minimizing risks by investing in different places.This sequence develops core models of international finance and open-economy macroeconomics, and surveys selected current research topics in the field.

Topics treated in the first semester include: growth and capital flows, external adjustment, international asset pricing, exchange rates, international portfolios, financial frictions and crises.

Chapter The Global Capital Market: Performance and Policy Problems. The International Capital Market and the Gains from Trade. International Banking and the International Capital Market. Regulating International Banking. Chapter Developing Countries: Growth, Crisis, and Reform.

Income, Wealth, and Growth in the World Economy/10(17).