The Five Tests Framework
Total Page:16
File Type:pdf, Size:1020Kb
Load more
Recommended publications
-
Capital Flows and the Exchange Rate of the Krone
25 Capital Flows and the Exchange Rate of the Krone Jakob Lage Hansen, Market Operations and Peter Ejler Storgaard, Economics INTRODUCTION AND SUMMARY Capital flows across national borders have increased in volume in recent years, both to and from Denmark as well as internationally. At the same time, the economic literature has turned more attention to the relation- ship between capital flows and exchange rates. Conventional exchange-rate models have sought to explain exchange rates in terms of the development in different macroeconomic variables such as the money stock, interest rates and inflation. These models have had limited empirical success, however. More recent research has intro- duced microeconomic explanations instead, e.g. foreign-exchange dealers' inventory management. The underlying intuition is that foreign-exchange dealers normally adjust their bid and offer prices to and from their inven- tories to match purchase and sales orders in the foreign-exchange market. In this way foreign-exchange dealers ensure that their inventories are not undesirably large or small. An overweight of purchase orders pushes prices up, while they are reduced if there is an overweight of sales orders. To the extent that capital flows trigger purchase or sales orders in the foreign- exchange market, they may therefore influence the exchange rate. This article considers the short-term relationship between capital flows to and from Denmark and the development in the krone vis-à-vis the euro in the period 1999-2004. Initially it is demonstrated that while there is a significant relation be- tween the krone rate and capital flows from portfolio investments on a monthly basis, it is not possible to identify an impact on the krone rate from capital flows from direct investments and other capital imports. -
The EDHEC Express – 18.1.2021
January 18th, 2021 THE EDHEC EXPRESS WEEKLY NEWSLETTER OF EDHEC STUDENTS FINANCE CLUB CONTENTS EUROPE Ford to close Brazil Deutsche Bank to pay $130m to manufacturing operations, take settle federal criminal and civil $4.1bn in charges 9 investigations 3 Walmart to create fintech start- Canada’s Couche-Tard ends up with investment firm behind €16.2bn takeover talks with Robinhood 10 Carrefour 3 YouTube Suspends Trump’s USA LSE’s $27bn Refinitiv deal Channel for at Least 7 Days 10 Capitol Riot Prompts Some Big approved by EU regulators 3 Boeing Falls Further Behind Banks and Companies to Pause Deliveroo valued at more than Airbus in Plane Deliveries 10 Political Funding 7 $7bn 4 Boeing to Pay $25m in Drone Blackstone eyes £3bn Signature Serious Fraud Office closes Settlement 11 bid with Bill Gates’s asset bribery inquiry of British WhatsApp fights back as users manager 7 American Tobacco 4 flee to Signal and Telegram 11 Gunmakers see stock price Shell resumes shipping after a U.S. Won't Ban Investments In increases in days after riots at year-long technical disruption 4 Alibaba, Tencent, Baidu–But 9 US Capitol 7 Veolia braces for shareholder Other Firms Are Set To Be Off PayPal blocks site that helped showdown in France’s most Limits 12 raise funds for those who vicious takeover battles 5 Fitch to buy CreditSights in bid attended Capitol violence 8 Telefonica stock surges after to bolster debt research 12 Twitter suspends 70,000 $9.4bn sale deal agreement 5 Google closes its Fitbit accounts sharing QAnon content ASOS exceeds revenue acquisition 13 8 expectations 5 Delta Air Lines Earnings: Facebook Says It Is Removing All Ericsson wins key ruling over Recovery on the Horizon 13 Content Mentioning ‘Stop the Samsung as US-China fight IBM Buys Cloud MSP Taos for Steal’ 8 pertain 6 Expertise in cloud industry 13 Amazon to remove QAnon Dr. -
The Danish Referendum on Economic and Monetary Union
RESEARCH PAPER 00/78 The Danish Referendum 29 SEPTEMBER 2000 on Economic and Monetary Union Denmark obtained an opt-out from the third stage of Economic and Monetary Union as one of the conditions for agreeing to ratify the Treaty on European Union in 1993. Adoption of the euro would depend upon the approval of the electorate in a referendum. The Danes voted on 28 September to decide whether or not Denmark would join the single currency and replace the krone with the euro. The result was 53.1% to 46.9% against adopting the euro. This paper looks at the background to the Danish opt- out, the pro- and anti-euro campaigns, political and public attitudes towards the single currency and implications of the vote. Vaughne Miller INTERNATIONAL AFFAIRS AND DEFENCE SECTION HOUSE OF COMMONS LIBRARY Recent Library Research Papers include: List of 15 most recent RPs 00/63 The Children Leaving Care Bill [HL] [Bill 134 of 1999-2000] 16.06.00 00/64 Unemployment by Constituency, May 2000 21.06.00 00/65 The Burden of Taxation 22.06.00 00/66 The Tourism Industry 23.06.00 00/67 Economic Indicators 30.06.00 00/68 Unemployment by Constituency, June 2000 12.07.00 00/69 Road Fuel Prices and Taxation 12.07.00 00/70 The draft Football (Disorder) Bill 13.07.00 00/71 Regional Social Exclusion Indicators 21.07.00 00/72 European Structural Funds 26.07.00 00/73 Regional Competitiveness & the Knowledge Economy 27.07.00 00/74 Cannabis 03.08.00 00/75 Third World Debt: after the Okinawa summit 08.08.00 00/76 Unemployment by Constituency, July 2000 16.08.00 00/77 Unemployment by Constituency, August 2000 13.09.00 Research Papers are available as PDF files: • to members of the general public on the Parliamentary web site, URL: http://www.parliament.uk • within Parliament to users of the Parliamentary Intranet, URL: http://hcl1.hclibrary.parliament.uk Library Research Papers are compiled for the benefit of Members of Parliament and their personal staff. -
A Stability Anchor in Turbulent Times1
Ewald Nowotny: The euro – a stability anchor in turbulent times1 Speech by Mr Ewald Nowotny, Governor of the Austrian National Bank, at the John Hopkins University, Bologna, 10 September 2009. * * * When the euro was created a little more than ten years ago, many doubted whether a common currency would be appropriate for the diverse economies of the euro area. The financial crisis has tested the new institutions severely. As this contribution argues, the ECB and the euro have passed the test very well. Having a common currency proved to be a valuable asset, preventing additional strains that would have resulted from pressure on fixed exchange rates, capital flight and exchange rate volatility. The paper portrays the measures taken by the Eurosystem to stabilize financial markets, encourage bank lending, support the real economy and ensure price stability. By delivering a common response to the crisis, monetary policy provided an anchor of stability for the European Union. This positive assessment, however, should not blind to the challenges posed by diverging trends within the euro area, e.g. in terms of competitiveness or imbalances in the current account. Turning the focus on the euro’s perspectives in the next ten years, the final section discusses the enlargement process and concludes on the future international role of the euro. 1. Proving the sceptics wrong? When a bit more than ten years ago, on 1 January 1999, eleven EU member states adopted the euro as single currency, they not only undertook a major step in the process of European integration whose importance is difficult to underestimate. -
40 Years of EU Membership
Journal of Contemporary European Research Volume 8, Issue 4 (2012) The UK: 40 Years of EU Membership Helen Wallace London School of Economics and Political Science This chronology was commissioned by the European Parliament Information Office in the United Kingdom and has been published here with their kind permission and that of the author. Professor Helen Wallace DBE, FBA is an Emeritus Professor in the European Institute at the London School of Economics and Political Science. Citation Wallace, H. (2012). ‘The UK: 40 Years of EU Membership’, Journal of Contemporary European Research. 8 (4), pp. 531‐546. Published in: www.jcer.net Volume 8, Issue 4 (2012) jcer.net Helen Wallace KEY DATES A chronology of significant events in British history, including the years leading up to accession on 1 January 1973. 19 Sep 1948 Winston Churchill: Zurich speech calling for a United States of Europe 7 May 1948 The Hague Conference, leading to Council of Europe, 140 British among the 800 participants 1950-1 Schuman Plan leading to European Coal and Steel Community: UK rejected invitation to join 1955 Messina Conference of the Six (Belgium, France, Germany, Italy, Luxembourg and The Netherlands) agrees to develop a common market and atomic cooperation via the Spaak Committee, which Russell Bretherton joined until withdrawn by UK government 1957-8 UK seeks to negotiate wider free trade area through the Organisation for Economic Cooperation and Development, but negotiations fail Jan 1960 Founding of EFTA (UK along with Denmark, Iceland, Ireland, Norway, -
The Quest for Regional Integration in the East African Community
The Quest for Regional Integration in the East African Community EDITORS Paulo Drummond, S. Kal Wajid, and Oral Williams INTERNATIONAL MONETARY FUND ©International Monetary Fund. Not for Redistribution © 2014 International Monetary Fund Cover design: IMF Multimedia Services Division Cataloging-in-Publication Data Joint Bank-Fund Library The East African Community : quest for regional integration / editors: Paulo Drummond, Kal Wajid, and Oral Williams. – Washington, D.C. : International Monetary Fund, [2014]. p. ; cm. Includes bibliographical references and index. ISBN: 978-1-48436-441-3 (Paper) 1. East African Community. 2. Africa, East – Economic integration. 3. Monetary unions – Africa, East. 4. Customs unions – Africa, East. 6. Social integration – Africa, East. I. Drummond, Paulo Flavio Nacif, 1966- II. Wajid, Syed Khalid S. III. Williams, Oral. IV. International Monetary Fund. HG1342.E32 2014 Disclaimer: The views expressed in this book are those of the authors and do not necessarily represent the views of the International Monetary Fund, its Executive Board, or management. Please send orders to: International Monetary Fund, Publication Services P.O. Box 92780, Washington, DC 20090, U.S.A. Tel.: (202) 623-7430 Fax: (202) 623-7201 E-mail: [email protected] Internet: www.elibrary.imf.org www.imfbookstore.org ©International Monetary Fund. Not for Redistribution Contents Foreword ........................................................................................................................................v 1 Overview ..........................................................................................................................1 -
Monetary Policy and Inequality∗
Monetary Policy and Inequality∗ Asger Lau Andersen (University of Copenhagen, CEBI and DFI) Niels Johannesen (University of Copenhagen, CEBI, DFI and CEPR) Mia Jørgensen (University of Copenhagen and CEBI) Jos´e-Luis Peydro´ (Imperial College, UPF-CREI-ICREA and CEPR) March 22, 2021 Abstract We analyze the distributional effects of monetary policy on income, wealth and con- sumption. We use administrative household-level data covering the entire population in Denmark over the period 1987-2014 and exploit a long-standing currency peg as a source of exogenous variation in monetary policy. We consistently find that the gains from softer monetary policy in terms of income, wealth and consumption are monotonically increas- ing in the ex ante income level. The distributional effects reflect systematic differences in exposure to the various channels of monetary policy, especially non-labor channels (e.g. leverage and assets). Our estimates imply that softer monetary policy increases income inequality by raising income shares at the top of the income distribution and reducing them at the bottom. JEL codes: E2, E4, E5, G1, G2, G5 Keywords: Monetary policy, Inequality, Household heterogeneity, Assets, Leverage ∗Asger Lau Andersen: [email protected]; Niels Johannesen: [email protected]; Mia Jørgensen: [email protected]; Jos´e-LuisPeydr´o:[email protected]. We thank Manuel Amador, Christina Arellano, Javier Bianchi, Martin Eichenbaum, Jordi Gal´ı,Veronica Guerrieri, Søren Hove Ravn, Pat Kehoe, Narayana Kocherlakota, Keith Kuester, Christian Moser, Elena Pastorino, Fabrizio Perri, Giacomo Ponzetto, Jaume Ventura, Gianluca Violante, Annette Vissing-Jørgensen as well as seminar audiences at the European University Institute, Federal Reserve Board, Danish Central Bank, Minneapolis Federal Reserve, Uni- versity of Copenhagen and Universitat Pompeu Fabra / CREI as well as participants at the Annual Conference of the Danish Financial Institute; Workshop on Recent Developments in Macroeconomic Modelling at CREI for valuable comments and suggestions. -
Occasional Paper Series
Occasional Paper Series Laure Lalouette, Alejandro Zamora-Pérez, Foreign demand for euro banknotes Codruta Rusu, Nikolaus Bartzsch, Emmanuelle Politronacci, Martial Delmas, António Rua, Marco Brandi, Martti Naksi No 253 / January 2021 Disclaimer: This paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB. Contents Abstract 2 1 Research question and objectives 3 2 The drivers of foreign demand 5 2.1 Literature review of the drivers of demand for cash abroad 5 2.2 Evidence from banknote demand functions 8 2.3 Analysis of the determinants of euro banknote net shipments 11 2.4 Cash holdings and currency substitution in CESEE countries: evidence from the OeNB Euro Survey 21 3 Estimating the share of euro banknote circulation outside the euro area 28 3.1 Net shipments data 28 Box 1 Recent developments in the net shipments of euro banknotes: the €500 issuance stop and the coronavirus (COVID-19) pandemic 32 3.2 The ECB’s external statistics division method 33 3.3 The seasonal method 34 3.4 The age of banknotes method 41 Box 2 First estimates of net cash remittances over time for the euro area 43 4 Conclusion: foreign demand, a key to the paradox of banknotes 47 Annex 1: Methodological notes on the data 49 Net shipments data 49 Wholesome trade data 49 Survey of households in CESEE 50 Annex 2: Remittance channels 51 Annex 3: Euro bill tracker 52 Annex 4: A tourist’s journey 53 References 54 ECB Occasional Paper Series No 253 / January 2021 1 Abstract In order to understand why there is a continuous increase in euro banknote circulation even though the use of cash for transactions is decreasing in the euro area – a phenomenon known as the paradox of banknotes – the members of the Overseas workstream of the Eurosystem Research Network on Cash (EURECA)1 have conducted a study on the foreign demand for euro banknotes. -
Europe and the Euro
This PDF is a selection from a published volume from the National Bureau of Economic Research Volume Title: Europe and the Euro Volume Author/Editor: Alberto Alesina and Francesco Giavazzi, editors Volume Publisher: The University of Chicago Press Volume ISBN: 0-226-01283-2 Volume URL: http://www.nber.org/books/ales08-1 Conference Dates: October 17-18, 2008 Publication Date: February 2010 Chapter Title: Euro Membership as a U.K. Monetary Policy Option: Results from a Structural Model Chapter Author: Riccardo DiCecio, Edward Nelson Chapter URL: http://www.nber.org/chapters/c11661 Chapter pages in book: (415 - 439) 11 Euro Membership as a U.K. Monetary Policy Option Results from a Structural Model Riccardo DiCecio and Edward Nelson 11.1 Introduction In June 1999, a poll taken of London- based economists indicated that 65 percent believed that the United Kingdom would join the euro area by 2005.1 A decade later, not only has U.K. participation in monetary union not taken place, but such a development no longer seems to be the question of “when, not if” that it once appeared. While euro entry has faded as a likely prospect for the United Kingdom, the decade of coexisting European Central Bank (ECB) and Bank of England monetary regimes has provided a fi rmer pic- ture of the differences between the two regimes and of the likely effect that monetary union would have on U.K. economic performance. The analysis that follows uses a structural open economy model to evaluate the effect that becoming a euro area member would have on the U.K. -
Nils Bernstein: a View from the Outside - Effects on the Introduction of the Euro
Nils Bernstein: A view from the outside - effects on the introduction of the euro Statement by Mr Nils Bernstein, Governor of the National Bank of Denmark, at the Conference "Experience with and Preparations for the Euro" at the Raiffeisen Landesbank Oberösterreich, Linz, 10 - 12 May 2006. * * * It is a great pleasure and honour to have been invited to give a view from an out-country on the effect of the introduction of the euro. Conferences like this offer an excellent opportunity for mutual exchange of experiences and discussion of issues related to monetary policy and financial sector developments. I will focus my statement on the effect of the euro for Denmark on four topics: Monetary policy, financial integration, trade integration and the requirements for fiscal policy and other economic policies. Finally, I will summarise our experience with the euro as the nominal anchor for inflation expectations within the Danish fixed-exchange-rate regime. First, let me describe the effects of the introduction of the euro on monetary policy in Denmark. Denmark maintains a fixed-exchange-rate policy vis-à-vis the euro area. Since the start of the third stage of the Economic and Monetary Union in the EU on 1 January 1999, the formal framework for the fixed-exchange-rate policy has been the European Exchange-Rate Mechanism, ERM II. Denmark participates in ERM II with a narrow fluctuation band of +/- 2.25 per cent around the central rate. The central rate is a conversion of the central rate of the krone vis-à-vis the D-mark in the previous European Exchange-Rate Mechanism (ERM I), and the central parity of the Danish krone vis-à-vis the anchor has now been unchanged for more than 19 years.1 Due to this long-standing experience with a firm fixed-exchange-rate policy, the introduction of the euro has not implied any major changes for the overall monetary-policy framework in Denmark. -
01644-9781452779126.Pdf
© 2004 International Monetary Fund August 2004 IMF Country Report No. 04/240 July 2, 2004 August 2, 2004 January 29, 2001 March 30, 2004 2004 July 28, 2004 Denmark: 2004 Article IV Consultation—Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Denmark Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2004 Article IV consultation with Denmark, the following documents have been released and are included in this package: • the staff report for the 2004 Article IV consultation, prepared by a staff team of the IMF, following discussions that ended on March 30, 2004, with the officials of Denmark on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on July 2, 2004 . The views expressed in the staff report are those of the staff team and do not necessarily reflect the views of the Executive Board of the IMF. • a staff statement of July 28, 2004 updating information on recent developments. • a Public Information Notice (PIN) summarizing the views of the Executive Board as expressed during its August 2, 2004 discussion of the staff report that concluded the Article IV consultation. • a statement by the Executive Director for Denmark. The document listed below have been or will be separately released. Selected Issues Paper The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information. To assist the IMF in evaluating the publication policy, reader comments are invited and may be sent by e-mail to [email protected]. -
An Impact Assessment of Negative Interest Rates of Central Banks
Online ISSN 2424-6166. EKONOMIKA 2017 Vol. 96(1) DOI: https://doi.org/10.15388/Ekon.2017.1.10662 AN IMPACT ASSESSMENT OF NEGATIVE INTEREST RATES OF CENTRAL BANKS Linas Jurkšas* Vilnius University, Lithuania Abstract. The central bank community has been split into those who started to employ negative interest rates (NIR) and those who do not intend to do so, irrespective of the similarity of the economic situation. Moreover, while five central banks have applied negative policy rates from 2012, the launch time, scope and motives behind differ significantly. The fact that central banks have simultaneously pursued NIR at a time when the global financial system is not in a crisis is unprecedented and is a consequence of several fundamental and mu- tual factors. So, the purpose of this paper is to find out the motivation behind employing negative policy rates and assess how NIR affect different economic sectors. The statistical analysis reveals that the overall outcome is highly controversial, depending on the weight assigned to each economic sector as well as to short- and long-term goals. On the one hand, NIR lead to an overall positive impact on aggregate consumption, incre- ased well-being of net borrower, investing NFCs, indebted governments and even financial institutions in the short run. On the other hand, savers and banks with high excess reserves and less room to reduce net interest margins are the most negatively affected. The impulse-response functions of created vector autoregression model for the euro area confirms these results: an interest rate reduction shock decreased borrowing and depo- sit rates, net interest margins but positively affected confidence, bond and equity prices, leading to somewhat higher expectations of economic growth and inflation in the longer term.