Search Results
Journal Article
Emerging markets and macroeconomic volatility: conference summary
This Economic Letter summarizes the papers presented at the conference on "Emerging Markets and Macroeconomic Volatility: Lessons from a Decade of Financial Debacles" held at the Federal Reserve Bank of San Francisco on June 4-5, 2004, under the joint sponsorship of the Bank's Center for Pacific Basin Studies and the University of Maryland's Center for International Economics. The papers are listed at the end and are available at http://www.frbsf.org/economics/conferences/0406/index.html
Journal Article
What are the risks to the United States of a current account reversal?
This Economic Letter turns to the recent empirical literature to learn more about the potential risks to the U.S. economy of a possible current account reversal and about the factors that are associated with more disruptive corrections.
Journal Article
The exchange rate-consumer price puzzle
Since February of 2002, the dollar has lost 27% of its value relative to other major currencies. Over the same period, consumer prices (excluding food and energy goods) have increased by a much smaller amount--8.9%. To economists, and particularly to central bankers and others who think about forecasting inflation, this relative insensitivity of consumer prices to exchange rates is a puzzle; indeed, it is one that has a long history and that is a characteristic not only of the U.S. but of other countries as well. ; Why is it a puzzle? Because international trade theory argues that, if all ...
Journal Article
What if foreign governments diversified their reserves?
World financial markets paid close attention when officials from both South Korea and Japan said that their governments were considering diversifying their holdings of foreign reserves. Since then, officials in both countries have insisted that they were not considering any major changes to the policy of reserve holdings. Nonetheless, the potential for a sell-off of dollar-denominated assets by foreign governments has raised some questions about the consequences of such a move. This Economic Letter attempts to put these issues into perspective. It begins with a review of recent trends in the ...
Journal Article
Does a fall in the dollar mean higher U.S. consumer prices?
This Economic Letter looks at the relationship among changes in the exchange rate value of the dollar and in import prices and overall consumer prices, with a particular focus on the current circumstances. It appears that the lower value of the dollar at this point is affecting U.S. prices less than it has historically. The reasons for the difference include changes in trading partners, changes in the composition of U.S. trade, and improved monetary policy over the last several years. Looking ahead, then, it appears likely that the recent dollar depreciation will have only very moderate ...
Journal Article
Financial development, productivity, and economic growth
Journal Article
The U.S. productivity acceleration and the current account deficit
This Economic Letter reviews the current facts about the current account deficit and its determinants, and describes the channels through which it is affected by an increase in trend labor productivity growth.
Journal Article
After the Asian financial crisis: can rapid credit expansion sustain growth?
In the years following the Asian financial crisis of 1997-1998, the governments of South Korea and Thailand each have sought to generate economic recovery by expanding domestic credit. The rapid credit expansion in both countries has created concerns about the extent to which their economies can channel these funds efficiently and sustain economic growth. In particular, if banks are unable to supervise the allocation of resources effectively, there is a risk of widespread bankruptcies and a financial system crisis. Previous experience shows that these Asian economies indeed may be at risk of ...
Journal Article
Are global imbalances due to financial underdevelopment in emerging economies?
This Economic Letter presents recent research on a new explanation for both the export of savings and the import of equity by emerging countries: their level of underdevelopment of the financial sector compared to that of more advanced countries. Specifically, financial underdevelopment in emerging markets can lead to both over saving by domestic agents and undervaluation of domestic firms, which encourages international investors to purchase equity there.