Weitere Kapitel dieses Buchs durch Wischen aufrufen
Is there evidence that the exchange rate depreciation shocks lead to the redistribution of income from workers to producers’ profits? In addition, to what extent do consumer price inflation and exchange rate volatility channels transmit exchange rate depreciation shocks to marginal propensity to consume? Evidence shows that the NEER depreciation shock has contractionary effects on economic growth. This is more so due to the income redistribution effects from workers to producers. The effects are propagated via the inflation channel. The presence of inflation following the NEER depreciation shocks exacerbates the decline in wages. This is in contrast to the magnifying effect of the NEER depreciation shock that raises gross operating surpluses. This suggests that the NEER depreciation redistributes the incomes from workers to producers, and the effects are magnified by inflation levels. Furthermore, price stability matters and a low inflation is ideal. The time varying marginal propensity to consume declines but the contraction is larger due to persistently rising exchange rate depreciation shock than a less persistent shock. In addition, the persistently rising exchange rate depreciation shock leads to a large increase in the Gini coefficient than a less persistent shock. This evidence shows the redistribution of income effects has implications for the time varying marginal propensity to consume and Gini coefficient. Moreover, the time varying marginal propensity to consume declines more in the presence of overall and permanent exchange rate volatility channels than when these are shutoff in the model. This evidence corroborates the findings that the time varying marginal propensity to consume is impacted by the elevated inflationary pressures and the accompanying exchange rate volatility following a NEER depreciation shock. These results show that price and exchange stability matters.
Bitte loggen Sie sich ein, um Zugang zu diesem Inhalt zu erhalten
Sie möchten Zugang zu diesem Inhalt erhalten? Dann informieren Sie sich jetzt über unsere Produkte:
Alexander, S. (1952). Effects of devaluation on trade balance. IMF Staff Paper, 3, 263–277. CrossRef
Bahmani-Oskooee, M., & Hajilee, M. (2010a). On the relationship between currency depreciation and wages. Applied Economics Letters, 17, 525–530. CrossRef
Bahmani-Oskooee, M., & Hajilee, M. (2010b). On the relationship between currency depreciation and domestic investment. Journal of Post Keynesian Economics, 32(4), 465. CrossRef
Bahmani-Oskooee, M., & Xi, D. (2012). Exchange rate volatility and domestic consumption: Evidence from Japan. Economic Systems, 36(2), 326–335. CrossRef
Cerra, V., & Saxena, S. W. (2008). Growth dynamics: The myth of economic recovery. American Economic Review, 98(1), 439–457. CrossRef
Pentecôte, J. S., & Rondeau, F. (2015). Trade spill overs on output growth during the 2008 financial crisis. Journal of International Economics, 143, 36–47. CrossRef
Yu, D. (2009). The comparability of Labour Force Survey and Quarterly Labour Force Survey. Stellenbosch University Economic Working Paper: WP08/2009.
- Exchange Rate Depreciation Shocks and Redistribution of Income: The Marginal Propensity to Consume Channel
- Chapter 10
Neuer Inhalt/© Stellmach, Neuer Inhalt/© Maturus, Pluta Logo/© Pluta, digitale Transformation/© Maksym Yemelyanov | Fotolia