Questions tagged [currency]

a generally accepted form of money, including coins and paper notes , which is issued by a government and circulated within an economy.

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216 views

How could the Roman sestertii/sesterces be converted into modern terms (say 2017 US$)?

Of course, the value of the sesterti must itself have fluctuated over the centuries it was in use. And so if I must narrow it down, I am particularly interested in its value during the time of ...
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Real time data map about the amount of a currency that are held in the world ?

Where can I see in real time data about the amount of a currency that is held in central banks (and maybe other significant places) ? A map would be great. I would like to know if there is an ...
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1answer
31 views

What is the effect on GDP when foreigners buy lots of domestic bonds?

I am trying to figure out the effect on GDP of foreigners buying lots of domestic bonds. From what I understand, when foreigners buy lots of domestic bonds: They need to convert their foreign ...
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2answers
117 views

Calculating the amount paid for a loan in today's dollars

So I was trying to figure out the amount paid for a loan in today's dollars using two different methods but they give me different results. I was hoping that someone could explain which method is ...
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34 views

Currency Denominations Affecting Prices

My question regards how currency denominations might artificially affect prices. For example, a baseball game that determines a good pricing scheme for parking would be charging 7 dollars per person. ...
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1answer
198 views

Conversion of GDP PPP International \$ 2005 into GDP PPP International \$ 2011

Essentially I have two different datasets that I'm trying to consolidate. One set of data comes from the World Bank Databank, and is a set of historical GDP PPP values for all countries expressed in ...
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1answer
60 views

What will happen to the reserves at the Fed?

Banks currently have 2.7 trillion Federal Reserves that they hold at their Federal Reserve account. It's part of the monetary base and these reserves were created when the Fed purchased bonds in their ...
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1answer
40 views

Is Currency Devaluation a cause or effect of interest rates?

I understand that Federal bank/Goverment can manipulate the currency market and devalue its currency by printing more money or buying foreign currencies/assets (essentially increasing the supply of ...
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31 views

What did Jevons mean by this quote?

Jevons (1875): Currency is to the science of economy what the squaring of the circle is to geometry, or perpetual motion to mechanics. I can't make any sense of this quote. I know that the "...
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35 views

What happens if a country omits the zeros of it's current money?

I mean, for example, the government changes all x10000 to x1; where x equals to currency of the respected country (Dollar, for instance).
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14 views

How is seigniorage redistributed in the Eurozone?

An ECB page notes that: As euro banknotes travel freely across borders, at any one time the number of banknotes in circulation registered at each national central bank can vary enormously. The ...
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109 views

“Increasing trade barriers causes a country’s currency to appreciate”?

Mishkin (2016, p. 476) writes: Barriers to free trade such as tariffs (taxes on imported goods) and quotas (restrictions on the quantity of foreign goods that can be imported) can affect the ...
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18 views

What are the issues with currencies backed by commodities?

I have seen it suggested that currencies that are backed by a commodity are generally considered to be a bad idea in most cases. However, I have done a bit of my own research into representative money ...
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136 views

Does accumulation of fiat currency cause instability?

If the value of fiat currency is a function of the supply of money and it's velocity, is the accumulation of that currency detrimental to its stability? I may be wrong in my understanding of the ...
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64 views

When/Why would a country want to create its own currency?

A while ago I asked how countries make a currency and give it value, specifically pointing out that I wasn't concerned about when/why such a thing would be done. Well, now I'm asking the exact ...
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28 views

Can a currency crisis be the proximate cause of a debt crisis?

I'm just curious whether there are any historical examples of a currency crisis in a country (speculative attacks leading causing a sudden devaluation of currency) leading directly to a debt crisis?
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24 views

In a closed system, what is the relationship, if any, between currency supply and market capitalization?

Assuming: A world in which the market value of publicly traded companies is known Any transaction to buy or sell stock of said companies can only be consummated with a new currency X, which is freely ...
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34 views

What are some benefits of local currencies?

Lets say that we have in my country Greece there is an Island Crete that it has big production (agriculture,small banks etc.) and produces big surplus compared with other parts of Greece and the ...
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27 views

Can a weaker currency be used to offset lower productivity of labour in an economy?

Can a weaker currency be used to offset supply-side (specifically low productivity of labour) problems of an economy to restore international competitiveness?
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24 views

Why was there a sudden rise in trade-weighted US dollar value in 2014-2015?

I was trawling the web and happened upon this graph: https://fred.stlouisfed.org/series/DTWEXM . The value of the trade-weighted US dollar was going steady until 2014-2015, rose rapidly, then it sort ...
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52 views

What's the equation of currency fluctuation?

Preamble: Today the rate of EUR is 82.09 in BDT ( Bangladeshi Currency) and two hours later it's 82.50 ( I hope, it's increasing). But why does this fluctuation just keeps happening? Looks like the ...
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71 views

How does foreign exchange settlement work?

How does the settlement of trades in foreign exchange work? For example, if I am a large company with money in dollars and I buy another currency like Deutschmarks with my dollars, how does the money ...
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72 views

How is the banknote denomination designed?

Recently India demonetized their 500 and 1000 rupee notes. As a replacement a new 2000 rupee note was introduced. This has resulted in some chaos in the commercial markets due to decreased ...
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23 views

How is the choice of banknote denominations made?

I'm not sure which SE network this question belongs to, but this seems to be the most appropriate one. What determines the choice of banknote denominations? Obviously, the first factor is the ...
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54 views

A country with dual payment system

Is there any country with dual domestic payment system? For instance, in the USA there are CHIPS or Fedwire both help wire transfer of USD within the USA. They give services to international ...
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71 views

What is the impact of a technology to produce gold at low cost?

Let's say in a few decades we can find a new technology to produce gold at low cost which will cause the price of gold to be as low as other metals. My question is that how would this have an impact ...
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23 views

Currency conversion and Purchase Power Data

Where can I find multipliers to convert a certain amount in a currency, say USD of 1960 to say present EUR taking account of purchase power parity ?
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177 views

How does a country increases or decreases it currency value (exchange rate) against other nations currency?

I want to know how a country, Mexico for instance, keeps the exchange rate higher or lower against other nations currency, USD, EUR, JPY. How does the value of a nation currency is valued against ...
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47 views

Should we get rid of the Penny?

Jeff Gore has suggested to scrap the 1 cent coins a few years ago. Why doesn't the US cancel the pennies? Is it really that bad as ?
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19 views

How does the imposition of import duties affect the nominal and real exchange rates in the long term?

Let's assume that a country imposes an import duty on goods imported from abroad. How will this change the long-term real exchange rate between domestic and foreign currencies? How will it affect the ...
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10 views

Depreciation of currency shall incentivise or disincentivise the foreign portfolio investors?

I am confused - if suppose currency depreciates then assets will become cheaper and foreign investors will find it enticing to buy these assets so in that case, foreign inflows shall increase In ...
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24 views

How to interpret correctly the uncovered interest rate parity condition

So, according to my macroeconomics professor's notes, the UNCOVERED INTEREST RATE PARITY CONDITION is defined this way : Now, i don't quite grasp the concept of the 'expected appreciation rate of ...
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1answer
77 views

Math based proof for currency changes (microeconomics)

This isn't part of my homework but I am genuinely interested in the mathematical proof behind this question (this is my line of work currently). I tried to work through it but after 2 hours gave up. ...
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21 views

US dollar the “Safe Haven”

Could anyone give me a detailed description on how the US dollar serves as the "safe haven" of assets when there are market stresses?
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1answer
25 views

Relationship between government expenditure and exchange rate?

I've read an increase in government expenditure can lead to or increase the chances of currency crisis but shouldn't it lead to the opposite? Fiscal deficit ----> Govt will undertake borrowings ---> ...
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12 views

With exchange rate parity, how do rates of return equalize?

Rate of return is equal to interest rate plus appreciation, is that right? If so, say you have a deposit in Canada and you find that the expected rate of return is greater in Australia. The demand for ...
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18 views

Equilibrium in currency devaluation?

In export oriented Economy, we often come across currency devaluation as means to boost exports. As per my understanding (please correct me if I am wrong), currency devaluation will immediately bring ...
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12 views

How does China control tax havens / finance flight differently?

It is said that china tries to prevent its money leaving overseas, for example yuan holding officials can't expatriate millions abroad or smuggle diamonds? How is that possible and efficient?
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20 views

Deflation equivalent of crack-up boom

A crack-up boom is the total depreciation of a currency resulting from both a continuous rise in its supply and a fall in its demand. Is it at least theoretically possible for such a process to exist ...
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10 views

Forward Currency Exchange

Could anyone help me understand the forward bid and ask for PLN/RON for the next 3 months. I know : Bid - Ask EUR/RON 4,7261 - 4,7309 CAD/RON 3,2302 - 3,...
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15 views

Measuring economic growth in GDP (in USD) vs Real GDP (domestic currency)

I've noticed that a lot of data online seems to measure a non-US country in USD. This seems odd to me, because doesn't that mean that US fiscal/monetary policies, politics, and economics would affect ...
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51 views

Are foreign currency exchange rate transitive?

For a given period, if USD strengthened against EUR by 5%, and EUR strengthened against GBP by 3%, does that imply that USD must have strengthened against GBP by ~8%?
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1answer
429 views

Currency Devaluation - As a Means of Paying Off Debt

From https://www.sapling.com/8117368/debt-handled-currency-devaluation: Currency devaluation will not only affect consumer debts, but it will affect how a country pays back its national debt. If a ...
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29 views

Effect of interest rates on currencies

I always understood that high interest rates in country A attract investors and cause the currency to appreciate. However, the interest rate parity theory suggests that high interest rates weaken a ...
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10 views

Commonly used indicators for currency pair strength?

I am attempting to write a program in Python that monitors a single currency pair, GPB/NZD to be specific. My main focus will be to run constant calculations every 2 to 3 minutes in order to give ...
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50 views

Inflation-adjusted units of account

In Chile, most of prices are measured in the local currency, the peso (currency code CLP). However, there are two other units of account. These are the UF and the UTM. These keep track of the real ...
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How does the euro swap for Greek debt work?

As I understand it, some portion of the Greek sovereign debt has been converted into "Euro swaps". Can someone explain in simple terms what that means? What debt was given to whom?
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1answer
36 views

What are the benefits of reducing zeroes from currency (eg: Iran)?

Recently, Iran decided to replace its old currency to a new one. Quoted from Wikipedia A proposal has been agreed to by the Iranian parliament to drop four zeros, by replacing the rial with a new ...
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2answers
63 views

Is fiat currency better than a backed-currency?

My question is would it be better if we went back to something like a gold standard but backed by a finite virtual material instead? It avoids the problem of fluctuations in gold supply. The money-...
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1answer
42 views

Do the stock performances of various companies have a measurable correlation with exchange rate?

For example if the values of big companies in a country decrease, will the value of that country's currency measurably decrease?