Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/66590
Authors: 
Hsing, Yu
Year of Publication: 
2010
Citation: 
[Journal:] International Journal of Economic Sciences and Applied Research [ISSN:] 1791-3373 [Volume:] 3 [Year:] 2010 [Issue:] 1 [Pages:] 39-47
Abstract: 
Applying an open-economy macroeconomic model, incorporating the monetary policy reaction function and uncovering interest parity, this paper finds that the expected real exchange rate and real output exhibit an inverted J-shape relationship, suggesting that expected real depreciation increases real output during 1999.Q2-2001.Q3 whereas expected real appreciation raises output during 2001.Q4-2009.Q1. Other findings show that a higher real financial stock price, a higher world real interest rate, or a lower expected inflation rate would increase real output. Fiscal prudence may be needed as the coefficient of the government borrowing/GDP ratio is insignificant at the 10% level.
Subjects: 
expected real depreciation or appreciation
monetary policy reaction function
fiscal policy
financial stock price
uncovered interest parity
JEL: 
E52
F31
F41
O52
Document Type: 
Article

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