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Smart Reasoning:

C&E

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Qaagi - Book of Why

Causes

Effects

The above - average increase in inflation under fixed exchange rate regimeleadsto real exchange rate appreciation

high capital inflowsresultin real exchange - rate appreciation

by capital inflows , such as aid(passive) caused byreal exchange rate appreciation

short - term capital inflowshave ledto real exchange rate appreciation

that a rise in relative traded goods productivity causes a rise in the relative price of non - traded to traded goods ( when compared across countriesleadingto a real exchange rate appreciation

All factorsdo ... leadto real exchange rate appreciation

an increase in foreign money supplywould causeappreciation in real exchange rate

Exchange Rates Increasing inflation in Chinacausesa real exchange rate appreciation

by aid inflows(passive) caused bythe real exchange rate appreciation

aid inflows(passive) being caused byreal exchange rate appreciation

aid inflowscausea real exchange rate appreciation

a rise in the relative price of nontradableswill leadto real exchange rate appreciation

by the appreciation of the euro(passive) caused bythe real exchange rate appreciation

the appreciation of the euro(passive) caused bythe real exchange rate appreciation

the increases in non - tradable pricescausethe real exchange rate appreciation

a fiscal expansionwill leadto a real exchange rate appreciation

the countrywould leadto real exchange rate appreciation

Increased public consumption following the boomcauseda real exchange rate appreciation

in turnleadsto real exchange rate appreciation

exchange - rate - based stabilization programsleadto real exchange - rate appreciation

to maintain exchange rate nearly fixed , while domestic inflation increases ( higher than inflation in the United Statethus leadingto real exchange rate appreciation

This movementwould also have contributedto real exchange rate appreciation

A rise in Home traded productivityshould leadto real exchange rate appreciation

With the price of tradables being exogenous to the system , the price of non - tradables is driven upcausesreal exchange rate appreciation

matters worseleadsto real exchange rate appreciation

The worldwide financial crisisresultedin real exchange rate appreciation

by the exploitation of the resource(passive) caused byreal exchange rate appreciation

government expenditure directed towards infrastructure and productivity enhancement in the traded sectorleadsto real exchange rate appreciation

which in turn may put pressure on nontradable prices and interest ratesleadingto real exchange rate appreciation

spending effects ... , and resource movement effects that favor the nontradable sector at the expense of tradable goods productionmay leadto real exchange rate appreciation

by the market forces of demand and supply(passive) is set byexchange rate rate

Foreign capitalleadsto exchange rate appreciation ( overvaluation

All these restrictionsresultin foreign exchange rate appreciation

The most important onesinfluencingexchange rate of AUDNZD

by the central bank(passive) caused byRMB exchange rate appreciation

An increase in the domestic interest rate relative to the foreign interest rate ... foreign capitalresultin the exchange rate appreciation

increase in interest rate ... demand for domestic currencyresultsin exchange rate appreciation

large foreign exchange inflowscausingexchange rate appreciation

domestic interest rate ... capital inflowleadsto exchange rate appreciation

An increase in domestic interest rates relative to those abroadwill leadto exchange rate appreciation

from rising domestic resource costsoriginatesfrom rising domestic resource costs

from large capital inflowscould ... resultfrom large capital inflows

from large capital inflowscan also resultfrom large capital inflows

other economic sectors(passive) caused byother economic sectors

a deterioration of competitiveness in both the export and the import competing sectors ... and this may cause a decline in investmentcausesa deterioration of competitiveness in both the export and the import competing sectors ... and this may cause a decline in investment

in stagnation in exportsresultedin stagnation in exports

a slower growth of real GDP because of a fall in netcausesa slower growth of real GDP because of a fall in net

in loss of competitivenessmay resultin loss of competitiveness

in loss of competitiveness for a countrymay resultin loss of competitiveness for a country

from the 1960s natural gas discoveries in the Netherlandsresultingfrom the 1960s natural gas discoveries in the Netherlands

foreign exchange reserves to swell , increasing the cost to policy - makers of allowing an appreciation and , therefore , lowering the likelihood of the fixed exchange rate being abandonedwill causeforeign exchange reserves to swell , increasing the cost to policy - makers of allowing an appreciation and , therefore , lowering the likelihood of the fixed exchange rate being abandoned

to any changeshould leadto any change

from " brutal " gyrations in the currency marketsresultingfrom " brutal " gyrations in the currency markets

in a loss of trade competitivenesscould resultin a loss of trade competitiveness

net exports to fallwill causenet exports to fall

to a decline in exportswill leadto a decline in exports

exports and investment(passive) caused byexports and investment

to lower CPI inflationcould ... leadto lower CPI inflation

to reduction in competitivenessledto reduction in competitiveness

to a fallshould leadto a fall

output to contract because of other factors such as contraction of aggregate demandcan causeoutput to contract because of other factors such as contraction of aggregate demand

a slower growth low forex rate real GDPcausesa slower growth low forex rate real GDP

export(passive) caused byexport

a slower growth of real GDPcausesa slower growth of real GDP

a price increase of domestic goods with respect to the foreign produced onesmight causea price increase of domestic goods with respect to the foreign produced ones

Instability(passive) is caused byInstability

Net eXports to fall which causes the IS curve to shift left again to where it startedcausesNet eXports to fall which causes the IS curve to shift left again to where it started

to economic vulnerabilityvery likely contributingto economic vulnerability

to higher wagesledto higher wages

a slower growth of real Gross Domestic Product ( GDPcausesa slower growth of real Gross Domestic Product ( GDP

in loss of competitiveness for a country , possibly leading to an increase in protectionism , which in turn could promote a round of beggar - thy - neighbor devaluationsmay resultin loss of competitiveness for a country , possibly leading to an increase in protectionism , which in turn could promote a round of beggar - thy - neighbor devaluations

capital lossmay causecapital loss

to a substantial rise in real cost of borrowingledto a substantial rise in real cost of borrowing

domestic inflation and monetary policy ... therefore focus oncan influencedomestic inflation and monetary policy ... therefore focus on

to inflationwill ... leadto inflation

to more inflationleadingto more inflation

to a more market - determined exchange rate on the long runwill contributeto a more market - determined exchange rate on the long run

importantly export growth , consumption , resource allocation , employment and private and foreign investmentscan influenceimportantly export growth , consumption , resource allocation , employment and private and foreign investments

domestic inflation and monetary policy ... therefore focus on exchange rate pass - through becomes essentialcan influencedomestic inflation and monetary policy ... therefore focus on exchange rate pass - through becomes essential

future exportsleadfuture exports

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Smart Reasoning:

C&E

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