There have been different degrees of exchange rate disequilibrium in the developing countries during recent transition or reform periods. The level of the exchange rate and its misalignment can have significant impacts on agricultural policy measures such as the Producer Support Estimates (PSEs). However, little efforts have been made to explicitly take into account the issue of exchange rate misalignment. In the conventional PSE studies the prevailing actual (nominal) exchange rates are usually used. There is general agreement that the use of actual exchange rates may introduce a bias in the PSE calculations, and that this bias can be substantial when the actual rates are significantly out of equilibrium, but there is much less agreement on the most appropriate alternative. This dissertation proposes a theoretical and an empirical model for estimating equilibrium exchange rates. Within the context of these models, the equilibrium exchange rates are argued to be determined by a group of real economic fundamentals. These fundamentals within this study include technological progress (Balassa-Samuelson effect), levels of government expenditure, world interest rate, net capital inflows, terms of trade, and openness of the economy. Base on various time series techniques and using data from India and China, sensible long-run relationships are identified between the real exchange rate and these economic fundamentals. The long-run co-integrating relationships are used to derive the equilibrium exchange rates and to gauge corresponding misalignments for the currencies in the two countries. The relevance and usefulness of the exchange rate equilibrium and disequilibrium in the calculation of the PSEs for India and China are then discussed. Results from the commodity-specific measures including the Market Price Support (MPS) and the PSE show that agricultural support levels are quite sensitive to alternative exchange rate assumptions. Specifically, exchange rate misalignments have either amplified or counteracted the direct effect on agriculture from sectoral-specific policies. With a few commodity exceptions such an indirect effect in both countries is relatively small in magnitude and dominated by the direct effect. This is also the case when the indirect effect rises substantially as a result of more misaligned exchange rates. Counterfactual MPS measure calculated assuming the exchange rate is in equilibrium with different exchange rate pass-through is also presented. It is shown that when no exchange rate pass-through to domestic prices occurs, the transfer of the indirect effect of exchange rate misalignment into the counterfactual MPS is full. But when there is exchange rate pass-through, even though partially, the transfer of indirect effect is significantly smaller. Results based on the commodity-specific PSE show that the exchange rate effect also depends on the relative importance of different PSE components. In addition to a positive impact on the direct effects measured by commodity-specific PSE compared to those measured by commodity-specific MPS, the increasing share of budgetary expenditures in India's agricultural support in recent years has resulted in more pronounced indirect effects. For China, the exchange rate effects are more similar between the PSE and the MPS measures at the commodity level because of the dominance of the MPS component relative to the budgetary payments in the PSEs. Moving from commodity-specific to aggregate measures, one can observe a similar pattern of agricultural support. However, the exchange rate effect measured by the total PSE appears to be more important: it becomes several times larger in magnitude than the direct effect in periods of severe exchange rate misalignment. The exchange rate effect when the PSE is "scaled up" from covered commodities to an estimate for the total agricultural sector is also demonstrated even though the assumption imposed by scaling-up may be unrealistic if price support is concentrated among those products included in the analysis. Since the commodity coverage in both countries tends to be incomplete and the scaling-up procedure leads to a total MPS component of greater magnitude, larger exchange rate effects are found in the scaled-up than the non-scaled-up version of the total PSEs. The impact of scaling-up on the indirect effect is proportional to the share of covered commodities in the total value of agricultural production. Again for the PSEs at both the commodity and aggregate levels, the counter factual measures indicate a full transfer of indirect effect of exchange rate when no exchange rate pass-through is assumed. A large portion of the indirect effect disappears when incomplete exchange rate pass-through is assumed resulting in a smaller transfer of the effect to the counter factual PSEs. / Ph. D.

This study has analysed the misalignment of the real exchange rates of the eleven original euro members at the introduction of the euro, and their consequences for inflation in the first five and ten years of the monetary union. Using four separate models of real equilibrium exchange rates, the largest overvaluations are found for Portugal and Germany, and the largest undervaluations are found for Ireland and Finland. In accordance with theory, adjustment towards equilibrium through inflation rate differentials seems to have occurred: the effect being clear with regard to two of the models, and ambiguous according to the two remaining. The study sheds light on the appropriateness of the conversion rates at the introduction of the euro in 1999, and the macroeconomic consequences of real exchange rate misalignment.

Submitted by Pierre Marinho (pierre.marinho@uol.com.br) on 2013-03-08T15:52:05Z No. of bitstreams: 1 MPFE_Dissertacao_Pierre da Silva Marinho_VF.pdf: 205056 bytes, checksum: f7e17dd57f3b948dffa3140396cbbb86 (MD5) / Approved for entry into archive by Suzinei Teles Garcia Garcia (suzinei.garcia@fgv.br) on 2013-03-08T15:55:29Z (GMT) No. of bitstreams: 1 MPFE_Dissertacao_Pierre da Silva Marinho_VF.pdf: 205056 bytes, checksum: f7e17dd57f3b948dffa3140396cbbb86 (MD5) / Made available in DSpace on 2013-03-08T15:57:28Z (GMT). No. of bitstreams: 1 MPFE_Dissertacao_Pierre da Silva Marinho_VF.pdf: 205056 bytes, checksum: f7e17dd57f3b948dffa3140396cbbb86 (MD5) Previous issue date: 2013-02-05 / The objective of this paper is to analyze the evidences of long-run relationship among three variables: real exchange rate ('RER'), international investment position ('NFA') and the Balassa-Samuelson effect ('PREL') in a group of 28 countries. This group is composed of countries in different stages of economic development. The methodology utilized to assess long-run relationship was cointegration. The tests performed were developed by Bierens (1997), nonparametric test, and by Saikkonen and Lütkepohl (2000a, b, c), test that firstly estimates a deterministic term. Evidences of cointegration were found in both tests for the majority of the countries. However, there were significant differences between the results of the two performed tests. These differences between the two results and also some special cases of countries that did not demonstrated evidences of cointegration require deeper studies on the long-run behavior of the three variables analyzed in this paper. / Este trabalho tem a finalidade de analisar as evidências de relações de longo prazo entre a taxa de câmbio real ('RER'), a posição internacional de investimentos ('NFA') e o efeito Balassa-Samuelson ('PREL') em um grupo de 28 países, grupo este que inclui países em diferentes estágios de desenvolvimento. A metodologia utilizada foi a de testes de cointegração. Os testes aplicados foram desenvolvidos por Bierens (1997), teste não paramétrico, e por Saikkonen e Lütkepohl (2000a, b, c), teste que consiste em primeiro estimar um termo determinístico. Evidências de cointegração são constatadas, em ambos os testes, na maioria dos países estudados. Entretanto, houve diferenças relevantes entre os resultados encontrados através dos dois testes aplicados. Estas diferenças entre os resultados, bem como alguns casos especiais de países que não demonstraram evidências de cointegração, requerem análises mais aprofundadas sobre o comportamento de longo prazo das três variáveis estudadas.

Magister Commercii - MCom / Issues pertaining to the misalignment of exchange rate have become central in the analysis of open economy macroeconomics for developing countries. This is at least due to two reasons: first persistent overvaluation of currency is seen as a powerful early warning of potential currency crisis and second protracted periods of exchange rate misalignment are highly associated with poor economic performance in a number of developing countries. Owing to this fact, economists are in concession that aligning real exchange rates towards their equilibrium values is an important component of macroeconomic policy adjustments in order to achieve and maintain a sustainable development. For this purpose the estimation of the degree of the real exchange rate misalignment has become pivotal. However, despite the concession among economists regarding the need to minimize the frequency and magnitude of exchange rate misalignment, the estimation of the equilibrium exchange rate (hence the misalignment) has been among the most controversial and challenging issues in modem macroeconomics. For several decades, the Purchasing power parity (PPP) approach-which is based on the law of one price-has been the most widely used methodology for the estimation of the equilibrium exchange rate in both developed and developing countries. In South Africa some attempts have been made to estimate the misalignment of the rand against major currencies on the basis of the PPP approach. However, large numbers of empirical studies show that PPP does not hold except in the 'ultra' long run. In addition, PPP's assumption of a constant equilibrium exchange rate makes it ill-fitted to serve as a bench-mark for the analysis of the exchange rate in countries such as South Africa that experience substantial structural changes. As a result a number of macro-econometric models underlying on the macroeconomic determinants of exchange rate have been developed, albeit with little applicability in developing countries. In this study, we have used Edwards' (1989) intertemporal general equilibrium model of a small open economy in order to estimate the degree of the real exchange rate misalignment and its impact on the international trade competitiveness of the South African economy for the period 1985:1-2000:4. For this purpose a dynamic single equation error correction model of a first order autoregressive distributed lag model, ADL (1,1), and five years moving average technique have been employed to estimate the exchange rate misalignment. Whereas impulse response analysis and variance decomposition techniques of a cointegrated VAR (vector auto regression) have been established to assess the impact of the misalignment on trade competitiveness. The fmdings of the study reveal that the real exchange rate had been consistently overvalued during the period' 1988:3-1998:2 but undervalued during periods 1998:3- 2000:4. For most of the periods during 1985:1-1988:2 the rand had been undervalued. More over the study discloses that exchange rate misalignment debilitates South Africa's international trade competitiveness accounting for 20 percent of the variation in competitiveness.

Submitted by Livia Goulart Vilela (liviagv@yahoo.com) on 2012-09-26T23:27:32Z No. of bitstreams: 1 Dissertação_Lívia_Final_v2.pdf: 1933004 bytes, checksum: 56ba00b78e8c42dd90363f775487104d (MD5) / Approved for entry into archive by Suzinei Teles Garcia Garcia (suzinei.garcia@fgv.br) on 2012-09-27T13:31:01Z (GMT) No. of bitstreams: 1 Dissertação_Lívia_Final_v2.pdf: 1933004 bytes, checksum: 56ba00b78e8c42dd90363f775487104d (MD5) / Made available in DSpace on 2012-09-27T13:32:37Z (GMT). No. of bitstreams: 1 Dissertação_Lívia_Final_v2.pdf: 1933004 bytes, checksum: 56ba00b78e8c42dd90363f775487104d (MD5) Previous issue date: 2012-09-04 / The purpose of this paper is to examine possible welfare gains from trade arrangements between Brazil and China, from the perspective of a computable general equilibrium model, named GTAP model. After an extensive description of the commercial and economic structures of the countries, in addition to their comparative advantage, it will be possible to simulate Preferential Trade Agreements, and from these, analyze the results of welfare measured by the Equivalent Variation. Another aspect regarding the Sino-Brazilian relationship, which can be analyzed by this measure of welfare, is the exchange rate misalignment in both countries and its consequences for trade transactions. Using the referred tools, the study seeks to determine the impact of such misalignment in the welfare of the countries, once the exchange is corrected through an adjustment in the tariff. / O propósito deste trabalho é examinar possíveis ganhos de bem-estar provenientes de arranjos comerciais entre Brasil e China sob a ótica de um modelo de equilíbrio geral computável, o chamado 'modelo GTAP' (sigla para Global Trade Analysis Project). Com base em uma descrição extensiva das estruturas econômicas e comerciais dos países e das Vantagens Comparativas de cada um deles, é possível simular acordos preferenciais de comércio e analisar os resultados de bem-estar por meio da medida de Variação Equivalente. Outro aspecto referente ao comércio sino-brasileiro que pode ser avaliado pela medida de bem-estar é o desalinhamento cambial dos dois países e as consequências deste para as transações comerciais entre ambos. Utilizando o mesmo ferramental anteriormente citado, o trabalho busca avaliar o impacto de tal desalinhamento no bem-estar dos países, uma vez que o câmbio seja corrigido via ajuste tarifário.

This thesis analyses whether the concept of monetary sovereignty evolves under the impact of globalization and financial integration, and provides a framework for assessing what this implies. Thereby, this thesis contributes to a better understanding of both the contemporary exercise of sovereign powers in monetary and financial matters and of the driving forces behind the evolution of international law in this field. As elaborated in chapter 1, the contemporary concept of monetary sovereignty proposed by this thesis is not static but dynamic in nature. Due to the dual nature of sovereignty as a concept having not only positive but also important normative components, monetary sovereignty cannot become eroded under the impact of legal and economic constraints. Chapter 2 examines the ongoing hybridization of international monetary law arising from changes in the sources of this complex body of law, from the unsuitability of the categories of ‘hard’ and ‘soft’ law for characterizing all normative evolutions in this field, and from the rise of private and transnational monetary law. Chapter 3 scrutinizes the phenomenon of exchange rate misalignment under monetary and trade law. Intrinsically related, it assesses which aspects of the IMF’s legal framework should be reformed in order to tackle contemporary challenges to the stability of the international monetary system, such as global current account imbalances. Chapter 4 analyses the increasing regionalization of monetary sovereignty. It argues that, to the extent that transferring sovereign powers to a monetary union is what provides a state’s population with maximum monetary and financial stability, the underlying transfers are not a surrender of monetary sovereignty, but its effective exercise under the form of cooperative sovereignty. Finally, chapter 5 assesses the implications of the contemporary concept of monetary sovereignty proposed herein for the reorganization of the international financial architecture in the wake of the Great Recession.