Found 12 article(s) for author 'Currency'

Addicted to Dollars

Addicted to Dollars. Carmen Reinhart, March 1, 2017, Opinion, “Since the end of World War II, the United States’ share in world GDP has fallen from nearly 30% to about 18%. Other advanced economies have also experienced sustained declines in their respective slices of the global pie. But you wouldn’t know it from looking at the international monetary system.Link

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The Country Chronologies to Exchange Rate Arrangements into the 21st Century: Will the Anchor Currency Hold?

The Country Chronologies to Exchange Rate Arrangements into the 21st Century: Will the Anchor Currency Hold? Carmen Reinhart, Kenneth Rogoff, February 2017, Paper, “Detailed country-by-country chronologies are an informative companion piece to our paper “Exchange Arrangements Entering the 21st Century: Which Anchor Will Hold?,” which provides a comprehensive history of anchor or reference currencies, exchange rate arrangements, and a new measure of foreign exchange restrictions for 194 countries and territories over 1946-2016. The individual country chronologies are also a central component of our approach to classifying regimes. These country histories date dual or multiple exchange rate episodes, as well as to differentiate between pre-announced pegs, crawling pegs, and bands from their de facto counterparts. We think it is important to distinguish between say, de facto pegs or bands from announced pegs or bands, because their properties are potentially different. The chronologies also flag the dates for important turning points, such as when the exchange rate first floated, or when the anchor currency was changed. We extend our chronologies as far back as possible, even though we only classify regimes from 1946 onwards.Link

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The Truth About Blockchain

The Truth About Blockchain. Karim Lakhani, January/February 2017, Paper, “The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. With blockchain, this article can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. This is the immense potential of blockchain. Although this article shares the enthusiasm for its potential, it worries about the hype.Link

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Dominant Currency Paradigm

Dominant Currency Paradigm. Gita Gopinath, December 2016, Paper, “Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) terms of trade are stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports and export expansions following depreciations are weak. Using merged firm level and customs data from Colombia we document strong support for the dominant currency paradigm and reject the alternatives of producer currency and local currency pricing.Link

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The Return of Dollar Shortages

The Return of Dollar Shortages. Carmen Reinhart, October 24, 2016, Opinion, “Immediately after World War II ended, a new phrase entered the economic lexicon: “dollar shortage.” European economies were coping with extensive war-related damage and a broad array of impediments to their efforts to rebuild their industrial base. At the time, the United States was the only provider of capital equipment for reconstruction. So, without access to US dollars, Europe’s economies could not obtain the inputs needed to increase their exports.Link

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Why shredding $100 bills could be great for the economy

Why shredding $100 bills could be great for the economy. Kenneth Rogoff, September 17, 2016, Video, “While more than half of all transactions in the US are electronic—think debit cards, Apple Pay and Venmo—there’s still a record $1.4 trillion in physical currency, from pennies to $100 bills, circulating in the global economy. That’s almost double the amount from a decade ago, and about 80% of that cash is in $100 bills. These large bills could be making us poorer and less safe, says Kenneth Rogoff, Harvard economist and author of the new book “The Curse of Cash.” For Rogoff, the benefits of phasing out both $50 and $100 bills are two-fold: It would hamper criminal activity and aid monetary policy.Link

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The Curse of Cash

The Curse of Cash. Kenneth Rogoff, 2016, Book, “The world is drowning in cash—and it’s making us poorer and less safe. In The Curse of Cash, Kenneth Rogoff, one of the world’s leading economists, makes a persuasive and fascinating case for an idea that until recently would have seemed outlandish: getting rid of most paper money.  Even as people in advanced economies are using less paper money, there is more cash in circulation—a record $1.4 trillion in U.S. dollars alone, or $4,200 for every American, mostly in $100 bills. And the United States is hardly exceptional. So what is all that cash being used for? The answer is simple: a large part is feeding tax evasion, corruption, terrorism, the drug trade, human trafficking, and the rest of a massive global underground economy.Link

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The Sinister Side of Cash

The Sinister Side of Cash. Kenneth Rogoff, August 25, 2016, Opinion, “When I tell people that I have been doing research on why the government should drastically scale back the circulation of cash—paper currency—the most common initial reaction is bewilderment. Why should anyone care about such a mundane topic? But paper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. Getting rid of most of it—that is, moving to a society where cash is used less frequently and mainly for small transactions—could be a big help.Link

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The Easy Money Contagion

The Easy Money Contagion. Carmen Reinhart, August 24, 2016, Opinion, “To consider the actions taken by the world’s major central banks in the past month is to invite an essential question: when – and where – will all this monetary easing end? At the end of July, the Bank of Japan announced that it would maintain its current negative interest rates and bond-buying program. At the same time, the BOJ pledged that it would nearly double its annual purchases of equity-traded funds, from ¥3.3 trillion ($32.9 billion) to ¥6 trillion. And yet the announcement of a monetary-policy package that in a different era would have been considered inconceivably accommodative, actually disappointed financial markets. To the chagrin of Japanese policymakers, the yen strengthened against major currencies.Link

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