Browsing by Subject "P24"

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  • Korhonen, Iikka; Juurikkala, Tuuli (2007)
    BOFIT Discussion Papers 8/2007
    Published in Journal of Economics and Finance, Volume 33, 1/2009, pp. 71-79
    We assess the determinants of equilibrium real exchange rates in a sample of oil-dependent countries.Our basic data cover OPEC countries from 1975 to 2005.We also include three oil-producing Commonwealth of Independent States (CIS) countries in our robustness analysis.Utilising several estimation techniques, including pooled mean group and mean group estimators, we find that the price of oil has a clear, statistically significant effect on real exchange rates in our group of oil-producing countries.Higher oil price lead to appreciation of the real exchange rate. Elasticity of the real exchange rate with respect to the oil price is typically between 0.4 and 0.5, but may be larger depending on the specification.Real per capita GDP, on the other hand, does not appear to have a clear effect on real exchange rate.This latter result contrasts starkly with the consensus view of real exchange rates determinants, emphasising the unique position of oil-dependent countries.Key words: equilibrium exchange rate, pooled mean group estimator, resource dependency JEL codes: F31, F41, P24, Q43
  • Koivu, Tuuli (2008)
    BOFIT Discussion Papers 1/2008
    Published in China Economic Review, 2009; Volume 20, Issue 3, September, Pages 455–470
    Chinese authorities have traditionally relied mainly on administrative and quantitative measures in conducting monetary policy, with interest rates playing a less prominent role. Additional support for this view resides in a number of earlier studies that have found that the impact of interest rates on the real economy has been miniscule. However, taking into account numerous reforms in the financial sector and more widely in the Chinese economy, interest rates may have gained some influence in the last few years. It is important to study the effectiveness of interest rates also in light of future reforms of the monetary policy tools in China. Whereas administrative policy measures were effective in guiding the behaviour of state-owned enterprises, the authorities may need to increase the use of more market-oriented monetary policy tools as the share of the economy in private and foreign ownership grows. We use a vector error correction model to study, within a credit demand framework, whether the impact of interest rates in China has become stronger over the last decade. Our results suggest that loan demand has indeed become more dependent on interest rates. albeit the channel from interest rate to the real economy is still weak. JEL classification: E52, P24 Keywords: China, monetary policy
  • Dabrowski, Marek (2013)
    BOFIT Discussion Papers 8/2013
    Achieving price stability has been a serious challenge for CIS countries. In the first half of the 1990s, they experienced very high inflation or hyperinflation, which had originated in the perestroika period and following the dissolution of the ruble area. After the introduction of new currencies and stabilization programs in the mid-1990s, inflation moderated to two-digit levels. However, for lack of sufficient fiscal policy support, this partial progress did not succeed in preventing the financial crisis of 1998/99. The economic boom of the 2000s allowed for a return to macroeconomic stability with stronger fiscal fundamentals, but nevertheless proved insufficient to withstand the shock from the global financial crisis of 2008/09. The paper analyses the evolution monetary policy regimes of in the CIS countries over the decade of the 2000s and early 2010s and is based on the publicly available cross-country statistics and other information provided by the IMF. The paper compares financial openness in these economies both de jure and de facto. These findings will be tested against the empirical data on exchange rate movements and changes in central banks' international reserves. The paper concludes with a discussion on practical choices which CIS countries have in respect of their future monetary policy regimes. Keywords: monetary policy, CIS, financial openness, inflation JEL: E42, E58, P24, P52
  • Koivu, Tuuli (2010)
    BOFIT Discussion Papers 18/2010
    Published in Economic Systems, Volume 36, Issue 2, (June 2012); 307–325
    This paper studies the wealth channel in China. Using the structural vector autoregression method, we find that a loosening of China.s monetary policy indeed leads to higher asset prices, which in turn are linked to household consumption. However, the importance of the wealth channel as a part of the monetary policy transmission mechanism in China is still limited. Keywords: China, monetary policy, asset prices JEL classification: E52, P24