IMF glosor

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• Fiscal federalism The ability to transfer economic recourses from areas with healthy economies to those suffering economic setbacks
• Financial account Net acquisitions of financial assets
• Positive FA A country is acquiring more value in financial assets than foreign countries are acquiring of its assets
• Current account The difference between exports of goods and services and imports of goods and services
• seigniorage The real resources a government earns when it prints money that it spends on goods and services
• The risk premium The risk premium reflects the difference in riskiness of domestic and foreign bonds
• p (italic) is the extra return invest require on domestic bonds compared to foreign ones due to their differences in risk
• Balance of payments The sum of the current account and capital balances, less the non reserve portion of the financial account balance
• Economic stability loss The costs which arise because a country that joins an exchange rate area gives up its ability to use the exchange rate and monetary policy for the purpose of stabilizing output and employment
• fisher effect A rise in a country's expected inflation rate will cause an equal rise in the interest rate
• Absolute ppp all countries price levels are equal when measure in terms of the same currency
• Government saving Net taxes minus government spending
• optimum currency area Is a region for which a single currency and a single monetary policy are optimal.
• Pricing to market When a firm sell the same product for different prices in different market
• Expenditure switching policy Changes the direction of demand shifting it between domestic output and imports
• eurobank A bank that accept deposit denominated in eurocurrencies
• Currency board the monetary base is backed entirely by foreign currency and the central bank therefore holds no domestic assets
• Fieldstein and horioka 1980 With perfect capital mobility between countries we would expect to see no relation between a saving and investment
• Maastricht treaty 1 - inflation rate No more the 1.5% above the EU state with the lowest
• Maastrich treaty 2 - Exchange The country must maintain a stable exchange rate
• Maastrich treaty 3 - Public deficit Public deficit no higher than 3% of GDP
• Maastrich treaty 4 - Public debt Below 60% of its GDP
• Floating against - Discipline Fixed rates discourage inflationary policies by CB and that is absent in floating
• Floating against - Destabilizing speculation Speculation on exchange rates changes could lead to instability in foreign exchange markets
• Floating against - Injury to international trade and investment Floating exchange rates make international prices more unpredictable thereby harmin international trade and investment
• Floating against - Uncoordinated economic policies Competitive currency practices can harm all countries involved
• Floating against - The illusion of autonomy CB are incentivised to intervene in exchange rate movements
• Eurocurrencies offshore currency deposits
• Gold standard The practise of selling domestic assets in deficit and buying in surplus

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