The Effects of Exchange Rate Change on the Trade Balance in Croatia
The Effects of Exchange Rate Change on the Trade Balance in Croatia

Author: Tihomir Stuka

Publisher:

Published: 2006

Total Pages: 30

ISBN-13:

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A reduced-form model approach was used to estimate the trade balance response to permanent domestic currency depreciation. For this purpose, long-run and short-run effects were estimated, using three modeling methods along with two real effective exchange rate measures. On average, a 1 percent permanent depreciation improves the equilibrium trade balance by between 0.94 percent and 1.3 percent. The new equilibrium is established after approximately 2.5 years. Evidence of the J-curve is also found. Overall, in the light of the results obtained, it is questionable whether permanent depreciation is desirable to improve the trade balance, taking into account potential adverse effects on the rest of the economy.

The Effects of Exchange Rate Change on the Trade Balance in Croatia
The Effects of Exchange Rate Change on the Trade Balance in Croatia

Author: Tihomir Stucka

Publisher: International Monetary Fund

Published: 2004-04

Total Pages: 36

ISBN-13:

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A reduced-form model approach was used to estimate the trade balance response to permanent domestic currency depreciation. For this purpose, long-run and short-run effects were estimated, using three modeling methods along with two real effective exchange rate measures. On average, a 1 percent permanent depreciation improves the equilibrium trade balance by between 0.94 percent and 1.3 percent. The new equilibrium is established after approximately 2.5 years. Evidence of the J-curve is also found. Overall, in the light of the results obtained, it is questionable whether permanent depreciation is desirable to improve the trade balance, taking into account potential adverse effects on the rest of the economy.

Developments and Trends in Croatian Balance of Payments
Developments and Trends in Croatian Balance of Payments

Author: Davor Galinec

Publisher:

Published: 2013

Total Pages: 16

ISBN-13:

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The main aim of this paper is to present domestic and external factors which have a significant impact on the balance of payments developments in Croatia since 1993 (wage movements, repatriation of foreign exchange savings from abroad, sovereign rating, interest rates, external debt rescheduling, budget deficit, exchange rate, capital inflow, etc.), analysis of movements on current & capital and financial account as well as the composition of current account deficit financing. In 1993 and 1994 mild surplus is recorded on current account, but since 1995 current account switched to deficit, continued with sub-periods of substantial widening. There is no simple rule for determination when a current account deficit is sustainable or not. The main sources of deficit financing were privatization-related FDI inflows and further external borrowing (taking into account shift in debt instruments from loans to bonds). Due to the fact that the largest part of trade in goods and services took place with the EU countries and that about 70% of transactions are realizing in EUR, a process of accession to the EU is very important for Croatia and it is expected that further strenghtening of trade relations with the EU will probably help to reduce Croatian trade deficit, as well as the current account deficit.

IMF Staff papers
IMF Staff papers

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

Published: 1988-01-01

Total Pages: 228

ISBN-13: 1451956770

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A central proposition regarding effects of different mechanisms of fi-nancing public expenditures is that, under specific circumstances, it makes no difference to the level of aggregate demand if the government finances its outlays by debt or taxation. This so-called Ricardian equivalence states that, for a given expenditure path, substitution of debt for taxes does not affect private sector wealth and consumption. This paper provides a model illustrating the implications of Ricardian equivalence, surveys the litera-ture, considers effects of relaxing the basic assumptions, provides a frame-work to study implications of various extensions, and critically reviews recent empirical work on Ricardian equivalence.

IMF Staff Papers
IMF Staff Papers

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

Published: 1952-01-01

Total Pages: 170

ISBN-13: 1451949391

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This paper discusses various foreign payments practices in the United States. Most foreign payments in the United States are, therefore, done along traditional lines in whatever manner. Several nontraditional practices, however, have developed in recent years as the result of trade and payments restrictions established by foreign Governments. The amount and type of exchange sold by the US banks to their customers are limited only, if at all, by regulations abroad or by the banks' own limitations. In making or receiving foreign payments, the US banks deal generally with three types of customers which are, in the order of their importance: exporters and importers, individuals or corporations desiring to make or receive nontrade financial payments, and speculators. Foreign payments for account of individuals are usually small individually however, in the aggregate, they represent an important function of the banks located in the larger cities with a considerable foreign-born population.

Macroeconomics for Professionals
Macroeconomics for Professionals

Author: Leslie Lipschitz

Publisher: Cambridge University Press

Published: 2019-01-23

Total Pages: 312

ISBN-13: 1108568467

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Understanding macroeconomic developments and policies in the twenty-first century is daunting: policy-makers face the combined challenges of supporting economic activity and employment, keeping inflation low and risks of financial crises at bay, and navigating the ever-tighter linkages of globalization. Many professionals face demands to evaluate the implications of developments and policies for their business, financial, or public policy decisions. Macroeconomics for Professionals provides a concise, rigorous, yet intuitive framework for assessing a country's macroeconomic outlook and policies. Drawing on years of experience at the International Monetary Fund, Leslie Lipschitz and Susan Schadler have created an operating manual for professional applied economists and all those required to evaluate economic analysis.