exchange rates

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The international effects of ECB’s monetary policy

What’s at stake: the literature on monetary policy spillovers is abundant of studies investigating the impact of the US Federal Reserve’s monetary policy announcements and actions on emerging market economies. More recently, economists have been investigating the effect of the ECB’s credit easing as well.

By: Silvia Merler Topic: European Macroeconomics & Governance Date: July 24, 2017
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The Italian Lira: the exchange rate and employment in the ERM

In the decades before Italy joined the Euro, the Lira was devalued many times relative to the Deutschmark. Were these re-alignments accompanied by long term improvements on the labour market? The data suggests this was not the case.

By: Maria Demertzis, Konstantinos Efstathiou and Fabio Matera Topic: European Macroeconomics & Governance Date: January 13, 2017
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The Eurozone needs less heterogeneity

Misalignments of real exchange rates continue to be the most visible and painful symptom of asymmetric shocks within the Eurozone. An important factor behind such misalignment is the difference in national wage formation and bargaining systems, especially between core and periphery members. This column argues that all members need to have institutions that ensure wage developments are in line with productivity developments. This would eliminate an important source of asymmetric behaviour and reduce resistance to EZ-wide fiscal mechanisms capable of absorbing asymmetric shocks.

By: André Sapir Topic: European Macroeconomics & Governance Date: February 17, 2016
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Real exchange rates in conflict zones

Several countries experiencing conflict have been able to maintain a stable nominal exchange rate and thereby their real exchange rates were either stable or even increased due to high inflation. In contrast, nominal exchange rates have recently crashed in Syria, Ukraine and Russia, but high inflation has partially or fully counteracted its impact on the real exchange rate.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: November 26, 2015
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The impact of the oil-price shock on net oil exporters

In the second half of 2014 and early 2015, international oil prices approximately halved. What have been the consequences of this sharp decline on net oil exporters, and what have been their policy responses?

By: Marek Dabrowski Topic: Energy & Climate, Global Economics & Governance Date: November 24, 2015
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China's financial liberalisation: interest rate deregulation or currency flexibility first?

In this follow-up, I argue that on top of these structural and institutional factors, there are also three short-term cyclical considerations in favour of a strategy of accelerating currency flexibility ahead of full interest rate liberalisation in China.

By: Guonan Ma Topic: Global Economics & Governance Date: May 19, 2014
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Why China’s haste to internationalise the renminbi?

This blog raises two questions. The first is puzzling: why is Beijing in such a hurry to internationalise its inconvertible currency? The second is bigger: can the RMB acquire the status of an international currency?

By: Guonan Ma Topic: Global Economics & Governance Date: April 11, 2014
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The ECB's rate cut is a surprising, but good move

Bruegel’s Director Guntram Wolff discusses the rate cut announced by the European Central Bank and says it’s surprising, but a good move.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: November 8, 2013
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Real exchange rate adjustments around the globe

Real effective exchange rate adjustment trends in the aftermath of the global financial and economic crisis were generally not out of line with historical developments, and were in the right direction for a number of major currencies, though with major exceptions. The largely asymmetric impact of the crisis on advanced and emerging countries and their different outlooks call for an exchange rate adjustment between the two groups. Yet neither of the two groups is homogeneous and, in particular, a weakened euro exchange rate toward all trading partners would help to overcome the euro crisis.

By: Zsolt Darvas Topic: Global Economics & Governance Date: December 12, 2012
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The G-20 and the currency war

(This article was a recent contribution to The Brookings Institution) At their meeting on October 23 in Gyeongju, the G-20 finance ministers agreed to recommit to more market-determined exchange rates and refrain from competitive devaluations. At a time when the “currency war” theme has captured imaginations, this is a welcome pledge. But it does not […]

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: October 24, 2010