The impact of exports, inflation, the rupiah exchange rate (ER), and foreign direct investment (FDI) on Indonesia's currency reserves is examined in this study (FER). FER dependent variable model's multiple linear regression equations, which also include independent variables rupiah, Indonesia. data used from 2001 to 2021, model estimation technique Ordinary Least Squares. demonstrates that hig...

The manufacturing sectors in Latin America have been more affected by the currency over/undervaluation than their counterpart in industrialized economies. From a panel data set covering 39 countries and 22 manufacturing sectors (2-digit) within 1995–2008, we formally test the hypothesis that there exists a Latin American effect and then investigate the possible reasons for this distinguished pa...

To what extent can exporters cushion the impact of currency appreciation shocks by using imported intermediates? We apply a partial equilibrium model with heterogeneous firms. Producers can serve the domestic market, export final goods, or import inputs. In the model, an exogenous exchange rate shock simultaneously affects the variable costs and revenues associated with exports and imports. The...

I propose a model of production and financing for firms in an open economy, which features financial frictions and imperfect competition in the domestic goods market. The optimal currency composition of debt comes from the motive to hedge currency exposure, which arises from the industry equilibrium in the domestic goods market. Using a panel dataset of traded Mexican firms, I find evidence tha...

In this paper, we consider a model in which spatial separation and limited communication create a transactions role for currency, and in which aggregate uncertainty associated with agents’ patterns of movement, creates a role for banks and allows the possibility of banking failures. We show that banks provide complete insurance in states of the world where there are no banking failures and that...

in recent decades, issuing of catastrophe bonds for covering the catastrophe losses such as earthquakes, floods, etc. are getting more widespread. the purpose of this paper is determination of the optimal interest rates for investors of these securities, so that it becomes attractive for them. this paper uses fire insurance data in the period of 1328 to 1388 and considers the peaks over thresho...

We analyze a two-country economy with complete markets, featuring two national currencies as well global (crypto)currency. If the currency is used in both countries, nominal interest rates must be equal and exchange rate between risk-adjusted martingale. Deviation from equality implies risk of approaching zero lower bound or abandonment currency. call this result Crypto-Enforced Monetary Policy...

This paper develops a new instrumental-variable (IV) approach to estimate the effects of different exchange rate regimes on bilateral outcomes. The basic idea is that the characteristics of the exchange rate regime between two countries (exchange rate variability, fixed or float, autonomous or common currencies) are partially related to the independent decisions of these countries to peg —expli...

One of the most striking economic trends over the past two decades has been the widening gap between interprovincial and international trade (Chart 1). Between 1981 and 1989, interprovincial exports in nominal terms failed to keep pace with GDP, dropping steadily from 27 per cent of GDP to 22.2 per cent. At the same time, international exports declined, but more gradually, slipping from 28.2 pe...