The effect of foreign debt on currency values

Article Abstract:

A model using combined monetary and asset perspectives exchange rates, adapted by including foreign debt, can be used to estimate the impact of debt on currency value, and this study suggests that foreign debt has an important negative effect on currency values. The study is based on a sample of 18 less developed countries, with the negative effect being found for 12 countries in the sample. Foreign debt appears to be generally linked to capital flight and a trade deficit, resulting in a depreciation of domestic currency, though in the case of the exceptions, such as Israel and Singapore, foreign debt implies excess demand for domestic assest from foreign investors, which can have a positive effect on exchange rates.

Noncommercial research organizations, Analysis, Finance, Developing countries, External debts, Foreign exchange market

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Migration with endogenous moving costs

Article Abstract:

A dynamic model of labor migration in which moving expenses decline with the number of migrants already settled in the region is examined. With endogenous moving expenses migration gradually happens over time. However, migration volume accelerates with time and may rise even as wage differentials decrease. Moreover, migration tends to follow geographical channels and low-moving expense individuals migrate first.

Models, Evaluation, Migrant labor, Labor mobility

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