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This study investigates the impact of exchange rate volatilities on international trade in Nigeria. I have a question (of the sort you will inevitably get from non-economists): What is the Your post seems to say that a nation’s current-account balance cannot change without a change in the real exchange rate of its currency. Nominal exchange rate The actual foreign exchange quotation in contrast to the real exchange rate, which has been adjusted for changes in purchasing power. If economists want to use the term ‘currency manipulation’, then they first need to define the term. The world's major currencies are the U.S. dollar, the euro, the British pound, the Japanese yen, the Australian dollar, the Swiss franc, the South African rand and the Canadian dollar. What applies to Great Britain applies equally to the other industrial nations which have driven their economic suckers into China. Instead, one individual number, typically an index, expresses how a domestic currency’s value compares against multiple foreign currencies at once.
(Of course, no one bothers about the current-account balance of a state, but I believe the concept makes perfect sense. Therefore, they are essential determinants for international trade. But, the trade-weighted exchange rate is practically never mentioned. I could go on, but you get the idea.Trying to get a handle on these concepts. Currency debasement, usually intended to increase exports, is a gift to the importers and fully paid by the citizens of the exporting country. Protectionist policies reduce both imports and exports.
The government can create a sovereign wealth fund.4. But if I am wrong and it does exist, then it surely refers to the real exchange rate, not the nominal rate. But that does not help their exporters as the advantage is offset by higher costs from the inflation, leaving the real exchange rate unaffected.There is nothing that any country can do to force another, against its will, to subsidize its economy in any way. A low real exchange rate is sometimes called a “competitive advantage”, although the concept has absolutely nothing to do with either competition or advantages.
It’s determined by the monetary policies of the two countries in question.
What Is the Nominal Effective Exchange Rate (NEER)?
And the CA surpluses in China have recently become much smaller. When there is a change in either domestic saving or domestic investment, the real exchange rate must adjust to produce an equivalent change in the current account balance. SHARE The offers that appear in this table are from partnerships from which Investopedia receives compensation. However, many different institutions rely on the International Financial Statistics (IFS) published by the IMF. I always thought interest rates affected the value of the currency and thus the ability to attract foreign investors but disability to sell domestic goods abroad. Cloud’s comment bears on this point. Is that also an intentional strategy? This event was followed by $1 trillion in capital outflows.John, The issue is not the nominal exchange rate, it’s the government saving policy.
SHARE It plays no role in trade.Protectionism is a set of policies (such as tariffs and quotas) that drives a wedge between domestic and foreign prices.
So there are actually four options; real and nominal bilateral exchange rates, and real and nominal trade weighted exchange rates.I see that the nominal exchange rate, Euro/USDollar, is 1 Euro = 1.12 USD. My point was not that a CA balance cannot change without a change in the exchange rate, but rather a government policy that aims for a bigger CA surplus works through changes in the exchange rate, and specifically the real exchange rate.Here’s an analogy. Furthermore, much of the concern about CA imbalances reflects long run trends, which cannot be explained by nominal stickiness.Don’t you mean misunderstood? It only describes whether a currency is weak or strong, or weakening or strengthening, compared to foreign currencies. This is because they had low domestic saving. The nominal exchange rate, the real exchange rate, and the trade-weighted exchange rate.
This study investigates the impact of exchange rate volatilities on international trade in Nigeria. I have a question (of the sort you will inevitably get from non-economists): What is the Your post seems to say that a nation’s current-account balance cannot change without a change in the real exchange rate of its currency. Nominal exchange rate The actual foreign exchange quotation in contrast to the real exchange rate, which has been adjusted for changes in purchasing power. If economists want to use the term ‘currency manipulation’, then they first need to define the term. The world's major currencies are the U.S. dollar, the euro, the British pound, the Japanese yen, the Australian dollar, the Swiss franc, the South African rand and the Canadian dollar. What applies to Great Britain applies equally to the other industrial nations which have driven their economic suckers into China. Instead, one individual number, typically an index, expresses how a domestic currency’s value compares against multiple foreign currencies at once.
(Of course, no one bothers about the current-account balance of a state, but I believe the concept makes perfect sense. Therefore, they are essential determinants for international trade. But, the trade-weighted exchange rate is practically never mentioned. I could go on, but you get the idea.Trying to get a handle on these concepts. Currency debasement, usually intended to increase exports, is a gift to the importers and fully paid by the citizens of the exporting country. Protectionist policies reduce both imports and exports.
The government can create a sovereign wealth fund.4. But if I am wrong and it does exist, then it surely refers to the real exchange rate, not the nominal rate. But that does not help their exporters as the advantage is offset by higher costs from the inflation, leaving the real exchange rate unaffected.There is nothing that any country can do to force another, against its will, to subsidize its economy in any way. A low real exchange rate is sometimes called a “competitive advantage”, although the concept has absolutely nothing to do with either competition or advantages.
It’s determined by the monetary policies of the two countries in question.
What Is the Nominal Effective Exchange Rate (NEER)?
And the CA surpluses in China have recently become much smaller. When there is a change in either domestic saving or domestic investment, the real exchange rate must adjust to produce an equivalent change in the current account balance. SHARE The offers that appear in this table are from partnerships from which Investopedia receives compensation. However, many different institutions rely on the International Financial Statistics (IFS) published by the IMF. I always thought interest rates affected the value of the currency and thus the ability to attract foreign investors but disability to sell domestic goods abroad. Cloud’s comment bears on this point. Is that also an intentional strategy? This event was followed by $1 trillion in capital outflows.John, The issue is not the nominal exchange rate, it’s the government saving policy.
SHARE It plays no role in trade.Protectionism is a set of policies (such as tariffs and quotas) that drives a wedge between domestic and foreign prices.
So there are actually four options; real and nominal bilateral exchange rates, and real and nominal trade weighted exchange rates.I see that the nominal exchange rate, Euro/USDollar, is 1 Euro = 1.12 USD. My point was not that a CA balance cannot change without a change in the exchange rate, but rather a government policy that aims for a bigger CA surplus works through changes in the exchange rate, and specifically the real exchange rate.Here’s an analogy. Furthermore, much of the concern about CA imbalances reflects long run trends, which cannot be explained by nominal stickiness.Don’t you mean misunderstood? It only describes whether a currency is weak or strong, or weakening or strengthening, compared to foreign currencies. This is because they had low domestic saving. The nominal exchange rate, the real exchange rate, and the trade-weighted exchange rate.