Foreign Exchange Constraint and Developing Economies

Edited by Aleksandr V. Gevorkyan, Ph.D., Henry George Chair in Economics and Associate Professor, Department of Economics and Finance, The Peter J. Tobin College of Business, St. John’s University, New York, US

‘Most emerging and developing economies face a persistent foreign exchange gap. Holding foreign exchange reserves, even in large amounts, does not eradicate the gap that essentially produces persistently foreign exchange constrained economies. This book is a very helpful collection of chapters that elucidates the various manifestations for the foreign exchange constraint. It covers a wide number of important topics such as capital flows, foreign debt, exchange rate policy, the role of MNCs, financial crisis, and others. The collection will be very helpful to researchers and policymakers.’

• Foreword by Barry EichengreenPreface and acknowledgementsPART I: CAPITAL MARKETS1. Foreign exchange constraint and select developing economies: insights from the Caucasus and Central AsiaAleksandr V. Gevorkyan2. Domestic sovereign yields puzzle in 2020: falling yields amid a large fiscalshock in emerging marketsHayk Avetisyan, Viacheslav Ilin, and Dmitry Yakovlev3. Wealth composition, valuation effect and upstream capital flowsUthman M. Baqais4. Non-financial corporations as financial intermediaries and theirmacroeconomic implications: an empirical analysis for Latin AmericaClaudia de Camino, Esteban Pérez Caldentey and Cecilia VeraPART II: CURRENCY AND EXCHANGERATE5. Currency relationships over time: a network analysis and case study ofMexicoGeorgia Bush, Serafin Martínez-Jaramillo, Luis O. L. Escobar-Farfán and ErwinFlores-Tamés6. On the limits of real exchange-rate targeting under foreign exchangeconstraintEduardo F. Bastian7. Optimal foreign exchange reserves in small open economies: the case of theCaribbeanDave Seerattan8. Two sides of a currency crisis in emerging economies: economic andbehavioural side of currency risk derivativesElżbieta Kubińska, Joanna Wyrobek, Łukasz Faryj and Anna Macko9. Real exchange rate, demand growth and labour productivity: a growth modelof cumulative and circular causationHugo C. Iasco-Pereira, Fabrício J. Missio, Frederico G. Jayme Jr and Douglas AlencarPART III: COVID-19 AND OPEN ECONOMY10. Capital flows and emerging market economies since the global financialcrisisOtaviano Canuto11. The Lebanese banking crisis: an exploration of the impaired bankingsystemSamar IssaIndex