Stable Currency Research Articles

Regional Inflation, Banking Integration, and Dollarization*

We exploit variation in consumer price inflation across seventy-one Russian regions to examine the relationship between the perceived stability of the domestic currency and financial dollarization. Our results show that regions with higher inflation experience an increase in the dollarization of household deposits and a decrease in the dollarization of loans. The impact of inflation on credit dollarization is weaker in regions with less integrated banking markets. This suggests that the currency-portfolio choices of households and firms are constrained by the asset-liability management of banks.

Partners, Institutions and International Currencies: The International Political Foundations for the Rise of the Renminbi

The use of an international currency is not just a natural market phenomenon; it relies heavily on international political foundations. The historical lessons of the four major international currencies—the pound, dollar, euro and yen—show that a strong partner network and a favorable international institutional environment are the two major political foundations for the formation of a stable international currency. The rise of the renminbi, as a late starter looking to become a major international currency, depends not only on the requisite economic conditions but on governmental diplomacy aimed at attracting more monetary cooperation partners and creating international institutions that support its worldwide use. This strategy reinforces the political foundations for the rise of the renminbi. Building a network of partners supporting the renminbi as an international currency and creating a system of international monetary institutions are the real tests of the issuing country’s political leadership. This political leadership capacity has three dimensions: public trust founded on reputation building; a centripetal force driven by provision of benefits; and coercive force applied through sanctions. Comparatively speaking, the renminbi is still in the early stage of its ascent, so the development of its political infrastructure should concentrate mainly on gaining public trust through reputation-building and employing centripetal force involving provision of benefits.

Competition of Currencies: An Alternative to Legal Tender

The aim of this paper is to question the scenario with legal tender law by an analysis of potential competition of alternative currencies. To accomplish such a goal, this study offers an original version of the dynamic macroeconomic model based on the money in the utility function. This model compares the current monetary conditions with the potential situation permitting more currencies circulating alongside. The main assumption about individuals' preferences over stable currencies underlines the whole paper with emphasis on the mathematical model. The outcome of the model reveals lower inflation rate in scenario with competition among currencies in comparison to the present scenario. This result by itself seems to favour the idea of an exclusion of legal tender clause and allowance of free currency competition. The final simulation of the model, using statistical software, brings to this so far unambiguous view scepticism due to possible difficulties during the discovery process.

Faktor-Faktor Yang Mempengaruhi Nilai Tukar Dollar Amerika Serikat Terhadap Rupiah Tahun 2000–2013

Exchange rate is one tool to measure a country’s economic conditions. The growth of a stable currency value indicates that the country has a relatively good economic conditions or stable. This study has the purpose to analyze the factors that affect the exchange rate of the Indonesian Rupiah against the United States Dollar in the period of 2000-2013. The data used in this study is a secondary data which are time series data, made up of exports, imports, inflation, the BI rate, Gross Domestic Product (GDP), and the money supply (M1) in the quarter base, from first quarter on 2000 to fourth quarter on 2013. Regression model time series data used the ARCH-GARCH with ARCH model selection indicates that the variables that significantly influence the exchange rate are exports, inflation, the central bank rate and the money supply (M1). Whereas import and GDP did not give any influence.

Das Prinzip der «Sachlichkeit in der Warenverteilung». Zum Marketingkonzept des Schocken Konzerns in der Weimarer Republik

Abstract The Principle of «Objectivity in Distribution». The Marketing Concept of the Schocken Group in the Weimar Republic The First World War and the Hyperinflation of the early 1920s threw the German retail trade into a serious crisis. After the currency stabilization of 1924 many companies tried to increase revenues and reduce overheads by focusing more on the demands of the customers. One measure taken most notably by some large companies was to build central advertising agencies to pool their energies. This essay explores the increased customer and marketing orientation of the textile retail trade by using the example of the department store group Schocken. The new business strategy of Schocken was accompanied by a similar corporate philosophy and was based on the principle of «objectivity in distribution». This principle affected their range of goods, their architecture and decoration of the shops, their customer service and their advertising strategy.

The eurozone crisis, German hegemony and labour market reform in the GIPS countries

AbstractThis article argues that the eurozone crisis has led to Germany hegemony, a feature of which has been complete resistance to a genuinely European solution to the crisis. German political leaders have sought to make the eurozone a more stable currency area by demanding far reaching labour market adjustment in the debtor countries of Greece, Ireland, Portugal and Spain, GIPS countries. This article assesses why Germany's leaders elected to act as a coercive hegemon and examines the labour market reform pathways being travelled by GIPS countries. It argues that the austerity regime enacted under German hegemony has obliged the GIPS countries to introduce important labour market reforms. However, these reforms have not threatened the integrity of established national systems of industrial relations. As a result a Euro war of attrition has opened up between the European core and periphery.

A Research on the Belt and Road Initiatives and Strategies of RMB Internationalization

Some problems exist in current international monetary system, such as dollar dominance and frequent fluctuation of exchange rate, which are not conducive to the development of trade, investment and global economy. Financial crises break out frequently. So we should reform the international monetary system and create a multi-polar international monetary system to regulate dollar conduct by mutual competitions. RMB internationalization is not only favorable to the stability of the world's currency, but also good to China's own development. The Belt and Road Initiative has been bringing more opportunities for the internationalization of the RMB. The Belt and Road Initiative aims to strengthen economic cooperation between China and its neighboring countries and promotes the regional economic prosperity. This strategy provides a good opportunity for China to develop trade, increase investment and expand financial markets. So RMB should take advantage of this opportunity to improve the proportion of RMB trade settlement, increase the amount of RMB investment and financing and accelerate the circulation of RMB, and then steadily push forward the process of RMB internationalization under the premise of controlling risks.

Long memory features and relationship stability of Asia-Pacific currencies against USD

This research study examines the behavior of currency rate, long memory features, and long-term stability in the returns of thirteen Asia-Pacific currencies (AUD, CNY, HKD, INR, IDR, JPY, KRW, MYR, NZD, PHP, SGD, TWD, and THB) against USD over a period of fourteen years (from 2nd January 2001 to 10th December 2014). The study uses descriptive statistics, ADF and PP test, Hurst exponent co-integration model, and figures to investigate the normality, stationarity, long memory features, and long-term relationship stability of sample currencies against USD. This study determined the values of the Hurst Exponent for the first window with 1,000 observations and the second window with 2,500 observations. This study provides significant evidence for the presence of long memory features and relationship stability. The findings of this study would help investors, exchange rate trade policy makers, exporters, and importers to make decisions on the investment, export, and import of goods and services.

ASSESSMENT OF THE EXTERNAL ENVIRONMENT FOR THE PURPOSE OF FINANCIAL PLANNING OF LIGHT INDUSTRY

Background research. The article summarizes the methods of evaluation of the environment of enterprises. Formulation of the problem. The features of the environment of light industry. Analysis of recent research and publications. The theoretical basis of planning and forecasting under uncertainty and risk at the level of enterprises and economic sectors contained in the works of many local and foreign scientists. Bold unexplored aspects of the problem. Growth and inflation, reducing the purchasing power and demand; employment and unemployment, which determines the purchasing power; interest rates on capital; stability of the national currency; availability and affordability of credit. Setting objectives. The study is evaluating the environment of light industry enterprises for the purpose of financial planning. Presenting main material. Within this study was conducted external evaluation macro for light industry Kiev region. The research and analysis of expert assessment indicate that antitrust regulation will not have a significant impact on the light industry enterprises of Kyiv region, with significant impact on enterprises of light industry Kiev area has tax regulations and requirements of environmental legislation that is binding for light industry Kiev region. Conclusions. It is worth noting that light industry enterprises of Kyiv region for the purposes of financial planning must take into account the political, economic and other factors.

Features of the legal regulation of of electronic money in Ukraine; civil legal aspect

Problem Setting. The development of information technology, e-commerce caused the appearance of such phenomena as electronic money. In order to ensure the stability of currency in Ukraine, as well as the protection of the rights of users of electronic money need effective legislative base. That’s why, the research of electronic money in private law relations is very important.The purpose of the article. The research of the nature, the role and functioning of the electronic money in Ukraine are engaged by researchers as Y. Grytsiuk, I. Trubin, A. Isaev, M. Savluk, SA Derevyanko, A. Chepur, etc.The article studies features of the legal regulation of electronic money in Ukraine. Analyzed the concept of means of payment, legal payment’s instrument, electronic payment instrument and their relationship with the concept of electronic money. It was found civilistic nature of electronic moneyConclusions. The conclusion is that electronic money is a monetary obligation payable to bearer in electronic form, as the basis for their issuance is a civil contract. In addition, after the exchange of cash or non-cash money to the electronic money they keep their traditional cost of money and can serve as payment instrument.

The Impact of Exchange Rate Pass-Through via Domestic Prices on Inflation in Iran: New Evidence from a Threshold Regression

There are various causes for inflation in macroeconomics. One of the important channels of experiencing inflation is through the international economy caused by external shocks. In this context, the impact of exchange rate volatilities on domestic prices known as Exchange Rate Pass-Through (ERPT) plays a vital role. The present paper deals with the impact of Exchange Rate Pass-Through on inflation in Iran. To do so, using a monthly time series data for the period 1983: 1-2014: 9, a Threshold Regression has been applied to estimate the relevant model. The results indicate a growth rate of monthly nominal exchange rate of 9.1 percent acts as a threshold rate. In other words, ERPT to domestic prices above the threshold is statistically significant whereas below the threshold, is not statistically significant. Therefore, due to the fact that one of the main functions of the central bank is to maintain a stable currency value it is very important to pay attention to the impact of Exchange Rate Pass-Through and its threshold effects in implementation monetary policies to curb inflation.

The Political Economy of Cooperation in Renminbi (RMB) Internationalization Between China and the ASEAN States: Opportunity and Challenge

The main argument of this article is if the collaboration between China and ASEAN members on RMB internationalization can proceed smoothly? This study explored the opportunities and challenges of both parties in their cooperation on RMB internationalization. In the cooperating on internationalizing the RMB, China and ASEAN members have encountered opportunities that are both economic and political challenges. China’s substantial economic growth and its stable currency are positive factors for China to cooperate with ASEAN. Nevertheless, several potential restraining factors remain that must be handled by both parties Economically, the uncertainties include whether China opens its capital account, how the Chinese financial market is developed, and how the economic hegemony of using the USD as a medium of exchange in bilateral transactions can be changed to using the RMB. Politically, territorial disputes, ideological differences, and the rapid growth of China’s military power remain the potential obstacles to bilateral economic cooperation.

Skala fluktuacji kursu złotego wobec wybranych walut w latach 2009–2014 – analiza danych empirycznych

Po okresie znacznych przeszacowań, od roku 2012 kurs złotego uległ widocznej stabilizacji. Chociaż najbardziej istotny dla polskiej gospodarki jest poziom relacji pieniądza względem euro, to również ważna jest analiza jego wartości względem dolara czy innych walut, emitowanych przez najważniejszych partnerów gospodarczych. Celem artykułu jest dokonanie charakterystyki zmienności kursu złotego i wskazanie najważniejszych tendencji w tym zakresie. Przedstawiono wyniki analizy relacji polskiego pieniądza w stosunku do euro i dolara, a dalej także względem pozostałych najważniejszych walut, tj. franka szwajcarskiego, funta brytyjskiego, korony czeskiej, rubla rosyjskiego i juana chińskiego. Jako metody badawczej użyto wskaźnikowej analizy danych statystycznych, w tym analizy korelacji. Okres badawczy to przedział 1.08.2009–31.07.2014. Analiza fluktuacji kursu złotego potwierdziła spostrzeżenie dotyczące zwiększenia stabilności relacji wymiennej polskiej waluty od roku 2012, co jest istotne przede wszystkim w odniesieniu do kursu względem euro, ponieważ podczas pobytu w systemie ERM2 ograniczenie jego wahań ma bardzo duże znaczenie dla wyboru wariantu prowadzonej przez władze polityki gospodarczej. Na podstawie przeprowadzonego badania, można było również ogólnie stwierdzić, że relacja złotego w stosunku do euro jest bardziej ustabilizowana niż względem dolara i że wartość PLN wydaje się ściślej powiązana z EUR niż z USD.

Are Indian rice exporters able to price discriminate? Empirical evidence for basmati and non-basmati rice

ABSTRACTThe role of exchange rate fluctuations on the pricing behaviour of Indian rice exporters in their major destination markets is examined using the pricing-to-market (PTM) model. The analysis was undertaken in a context where India has emerged as a leading exporter of rice in the world market. The study distinguishes between basmati and non-basmati rice in the analysis as the destination markets differ across these two varieties. One of the key contributions of this study is that it undertakes an analysis under 3 exchange rate models, they are: nominal, real and commodity-specific exchange rates. The results from our analysis indicated the presence of non-competitive pricing behaviour of India’s rice exporters in majority of destination markets due to both the market-specific characteristics as well as exchange rate-induced effects. The amplification of exchange rate effects was more prominent in commodity-specific exchange rate model whereas local currency stabilization was more prominent under nominal and real exchange rate models. Furthermore, the analysis showed that the commodity-specific exchange rate better predicts the PTM behaviour of rice exporters.

Central banks’ mandate and objectives: Evolution and the crisis lessons

On the basis of studying the evolution of goals and objectives of the monetary authorities of a wide range of countries the authors argue the inexpediency of expanding the Bank of Russia’s mandate. It fits into international practice, and also meets the requirements and characteristics of the present stage of economic development. In the pursuit of price stability, the regulator not only maintains the stability of the national currency, as required by the its mandate, but also contributes to the acceleration of economic growth.

A World Trade Organization for the 21st Century: The Asian Perspective

A World Trade Organization for 21st Century: The Asian Perspective. Edited By Richard Baldwin, Masahiro Kawai and Ganeshan Wignaraja. Cheltenham, UK and Northampton, USA: Edward Elgar, 2014. Pp. 429. As an increasing proportion of world economic activity shifts to Asian continent and various regional trade agreements proliferate, a book focusing on future role of World Trade Organization (WTO) is a delight to any intellectual mind aspiring to dig deep into issues related to international trade. The book touches upon all issues that are central to shaping current global trade architecture. It specifies that governance of international trade in present day has to address the intertwining of trade, investment, intellectual property and --something that has not been able to address convincingly till date. The chapters of book may be roughly divided into four groups. Although book does not divide these groups explicitly, a brief roadmap is provided in introductory chapter. To address changing paradigm of international trade, first group (Chapters 2 and 3) define concept of value-added trade and supply chain trade, an issue that is particularly relevant while talking about trade in East and Southeast Asia. The challenges of not having kept up with changing times and need for WTO 2.0 are mentioned. In second group, Chapters 4 and 5 deal with question of firm level determinants in joining global supply chain, and industrial policies to facilitate trade in value chains. The question of firm size as a determinant to join a supply chain is investigated rigorously and results are shown to vary by region across East and Southeast Asia. The role of investment in technology and technology upgradation stands out as a significant determinant. The role of government in formulating policies to facilitate small-medium enterprises (SMEs) joining supply chain is postulated. It concludes that a strong role of government in infrastructure development in close coordination with private actors is most suitable. In third group (Chapters 6 to 10), focus shifts to policies relevant for international transactions. Specifically, Chapters 6 and 7 analyse exchange rate policies and responses to economic crises through protectionism. The protectionist stance taken as a reaction to recent financial crises is found to have been higher in developed countries than developing ones in Asian region. The style of protectionism is also outside governing areas and span areas of discrimination against foreign firms, services and workers, just to name a few. On exchange rate policies, trend across partners in a Free Trade Agreement (FTA) of maintaining stable currencies amongst FTA members is observed, highlighting distortionary effects on trade outside bloc. This is followed by analysing trends towards regional integration through policy challenges in context of Asian FTAs and mega regional trade agreements (RTAs) like Regional Comprehensive Economic Partnership (RCEP). The pivotal role of Rules of Origin (ROO) in context of any FTA in determining preference given to FTA members is analysed while addressing other challenges of integrating famous Asian noodle bowl effect. The prospects of ASEAN Economic Community (AEC)--the impediments and integrating factors and its effects--are further discussed. …

ANALISIS KELAYAKAN DOLAR AMERIKA, EURO, DAN DINAR EMAS DALAM KONVERSI DOLAR AMERIKA SEBAGAI ALAT LINDUNG NILAI DENGAN EMAS SEBAGAI ALAT UKUR DALAM LAPORAN KEUANGAN

For this study was to analyze the potential of the Gold Dinar as a hedging tool replaces the U.S. Dollar. U.S. Dollar in recent year experienced extreme exchange rate movements so that researchers analyzed the stability of the current compared to Euro that threatening position U.S. Dollar as the worlds major currencies. Stable currency has the accuracy and reliability in an accounting information to make decisions of an organization or company. The data used in this study is secondary data by type of time series. Monthly data from 2003 antil 2012. To determine the stability of each currency, the data obtained should be free from containt of the unit root, has a normal distributed, and constant. The volatility calculation of 0.0408792 (Gold Dinar), 0.0408790 (U.S. Dollar), and 0.040540 (Euro). Volatility is a statiscal measure of the diversion returns for a given security. From the research that has been done, calculation of the Euro states have a low risk of change in value and have a steady rate. With that result, Euro can be reference currency in financial reporting.Keywords: Hedging, U.S. Dollar, Euro, Gold Dinar, Gold, Accounting Information, Financial Reporting.

Economic Policy Coordination as a Game Involving Economic Stability and National Sovereignty

The economic crisis has paved the way for reconsideration of the Eurozone's constitutional design. This paper shows that what may seem as a massive empowerment of European institutions at the cost of national economic sovereignty in actual constitutional practice has left economic policy coordination largely unchanged. By means of conceptualising its previous and current patterns as a game between supranational and national institutions, it is shown that the scale of change has been widely exaggerated. The new Eurozone design has mitigated in practice the extent to which national economic sovereignty has been undermined, but only at the cost of shifting to the European Central Bank the burden of shoring up the stability of the common currency; such burden the ECB is bound to prove unable to sustain in the long run.

Bitcoin vs. Regulated Payment Systems: What Gives?

In a short period of time virtual currencies have gained significant traction and become an economic reality, with Bitcoin being the most dominant among over 500 virtual currencies. Bitcoin and other virtual currencies present a particularly difficult and unique jurisdictional challenge to existing regulatory enforcement because of their: ability to transcend national borders in the fraction of a second; and anonymity due to encryption. In January 2014 the Uniform Law Commission (ULC) created a Study Committee on Alternative and Mobile Payments (Study Committee). The focus of the Study Committee (now designated a Drafting Committee) is to devise an optimal licensing system for intermediaries that perform financial services for third parties relating to digital or virtual currencies. The Study Committee/Drafting Committee concluded that the New York regulatory framework for virtual currencies (New York “Bitlicense” Regulation) is “well drafted” and (with some changes) could serve as a beginning template for a uniform law. At this writing, a remaining significant issue is the extent to which the proposed uniform law should go beyond the licensing, compliance and enforcement issues common to the CSBS regulatory framework and the New York “BitLicense” Regulations, to cover substantive commercial transaction issues as in the UCC. Advances such as the blockchain technology underlying Bitcoin and many other virtual currencies may hold great promise for efficiencies in the transfer cost of money and data.This article addresses the legal and financial implications of virtual currencies, and is organized as follows. Part II. presents a brief history describing the evolution and function of money and currencies. Part III. describes the development of virtual currencies and Bitcoin in particular. Part IV. discusses traditional payment and regulatory systems. Part V. looks at criminal law issues relating to currencies. Part VI. considers the history of modern payment systems and regulation, currency stability issues, and the possible threat to financial order posed by virtual currencies. Part VII. Explores the future of regulation in this area of law. Implications for further research are then presented. The focus is the impact on payment systems of the rapidly developing use of virtual and cybercurrencies, especially bitcoins.

Euro crash risk

Abstract We identify crucial events during the European sovereign debt crisis and investigate their impact on the euro currency. In particular, we analyze how specific announcements related to vulnerable eurozone member states, European Central Bank (ECB) actions, and credit rating downgrades affect the value and the crash risk of the euro. We proxy the appreciation and depreciation of the euro by its abnormal foreign exchange (FX) rate returns with respect to 35 currencies. The crash risk of the euro is proxied by the conditional skewness of the FX rate return distribution with respect to the same currencies. We find that the market reacts positively to news related to countries under EU/IMF rescue umbrella. We discover that ECB actions on average result in a euro depreciation on the day of the announcement reflecting obvious concerns of market participants, but the effect is partly reversed the day after. Our analysis also shows that sovereign and corporate credit rating downgrades tend to lead to a depreciation of the euro and, more importantly, to an increase of the euro crash risk. Interestingly, we find that specific announcements about Greece on average do not substantially affect the euro exchange rate directly; however, it does have an overall significant effect on the euro crash risk, imposing a substantial risk for the stability of the common currency in the eurozone.