Suchergebnisse

This paper sets up a simple portfolio balance model and investigates how commodity prices will exhibit as the monetary authorities conduct a pre–announced monetary policy. It is found that agricultural prices will rise discretely on impact but may either overshoot or undershoot its long-run level at the instant of policy announcement. Our results also indicate that, during the period following the announcement but prior to the monetary expansion, rising agricultural prices are coupled with an accumulation in the stock of agricultural products. However, when monetary expansion actually takes place, two possible patterns of adjustment may happen: rising agricultural prices are matched by a decrease in the stock of agricultural products and falling agricultural prices are coupled with an accumulation in the stock of agricultural products.

AbstractUsing a dynamic model of an open monetary economy, this paper examines the effects of tourism‐related anticipated shocks on goods prices and foreign exchange reserves. Foreign tourists consume mainly non‐traded goods in holiday destinations, converting them into exportable goods. This gives rise to a tourism terms‐of‐trade effect that affects the accumulation of foreign exchange. Announcements of anticipated events bring tourist visits forward, resulting in an initial under‐adjustment or an over‐adjustment in the prices of the non‐traded goods when the tourism terms‐of‐trade effect is positive or negative. This leads to an increase or a decrease in foreign reserves in the long run.