Essay on The J-Curve Phenomenon in Jamaica: Fact or Fiction?

dollar was close to an eight year shortage against the real, having lost more than 33% of its value during 2009 alone. During the past 12 month era, the exchange rate of the U.S. dollar (USD) has diverse from a low of BRL R $1.5310 to in height of BRL $1.7790. During 2010, the United States dollar typically kept an everyday exchange rate between (BRL) R$1.70 and (BRL) R$1.80, occasionally reducing below the (BRL) R$1.70 level.

determined by the flows of goods and the determinants of exchange rate in the long

Changes in exchange rates are the result of changes in demand and supply factors for goods and services, such as changes in tastes, relative incomes, and relative prices. Under a flexible-rate policy, all domestic prices are linked with foreign prices. Any change in the exchange rate automatically alters the prices of all foreign goods to domestic goods. The price change alters the relative attractiveness of imports and exports and maintains equilibrium in each trading partner's balance of

The island of Jamaica is very rich in culture and has many historic turnabouts throughout the years. The country has a rich and complex history including being the first country to have Arawak and Taino Indians settle there.

The financial crisis of 2008 has been described as the worst financial crisis the world has seen since the great depression, but there are now murmurings of the potential for an even greater financial crisis, a currency crisis, caused by the demise of the US Dollar. The Dollar has been the reserve currency of the world since it took over from the Pound at the end of world war two, but we examine if it is about to crash spectacularly?

This paper aims to compare the Japanese Yen against the US Dollar over a five year period starting from 2005 till 2010. The exchange traded fund for Japanese Yen shall also be discussed in the paper and afterwards an analysis of both the currencies shall be presented. There are different factors that influence the exchange rate differences between any two chosen currencies. The effects produced by these different exchange rates can be of quite different intensity. The most common elements that have an impact on exchange rate difference include economic factors, socio political factors and other behavioral or technical factors also. The macroeconomic factors such as growth of a country, employment rate, gross domestic product etc. All

In today's international marketplace, it is American consumers who are flush with cash to buy ever-greater amounts of imports. And it is the U.S. economy that is producing the investment opportunities that attract savings from around the world. In contrast, Japan has been plagued for most of the decade by slow growth (if not outright recession), falling demand, rising unemployment, and a bust in asset values. Meanwhile, the major economies of the European Union have struggled with sluggish growth and chronic high unemployment. In fact, advanced nations that ran trade deficits in the 1990s (the United States and Great Britain) grew faster and created more jobs than those that ran trade surpluses (Germany, Italy, and Japan). The result of economic troubles abroad has been a flight of capital to the United States and the stagnation of U.S. export growth-essential ingredients in the rising U.S. trade

With the mortgage crisis recorded in the United States, the country’s currency declined in value in respect to other world currencies. Increase in money supply led to an increase in the volume of money in circulation in the United States. This led to a rise in prices of goods. Because of this, the value of the dollar declined in the international money markets. The decline in value of the dollar led to imports becoming very expensive. This further reduced the country’s production capability, leading to a further economic decline. A devalued currency makes a country’s exports cheaper than those of other countries. This has the potential of boosting the level of exports in countries with devalued currency thus reducing their balance of

The Japanese government believes that the growth in exports has kept their economy afloat. The intervention to support the dollar was necessary for the exchange rate to stay at the level where it is, which will not increase the prices of products

since 2000 (Edwards, S., 2005).” As a result of the increase in foreign demand for U.S. assets, Americans have had access to foreign investment enabling the United States to function with large deficits for years. Looking forward, the United States dollar and the economic health of the country is very dependent on foreign investment in U.S. assets. A potential risk looms in the chance that Asian central banks might lower their demand in U.S. assets resulting in a sharp decline in the U.S.

Columbus discovered Jamaica on May 5, 1494, one year after he heard of the existence of the island. However, the true history of Jamaica begins with the African-Jamaican people who came to the island twenty years after the English took control from the Spaniards. The history of Jamaica can be broken up into different time periods, which were defined by watershed moments or events. Jamaican history begins with the establishment of the native islanders called the Tainos who inhabited the island for hundreds of years before the discoveries of Columbus. (JNHT 1)

We use the term "reserve currency" when we mean other countries ' use of dollars in international trade. If Sweden, for example, buys goods from China, the goods can be paid with American dollars instead of Swedish Krona. The methodological approach to address how, when and why the dollar became the world’s reserve currency will be supported by a historical and statistical analysis. With a better understanding on how the U.S dollar become the most powerful currency we can advance to understand the cost and benefits of it.

It is often suggested that the large current account deficit poses a serious financing problem for the United States. Each year, the lament goes, the United States must attract net inflows of capital sufficient to "cover" the huge current shortfall. But this proposition gets the logic backward: the U.S. deficit is "financed" by net capital inflows only in an ex post accounting sense. In economic terms it is more nearly correct to say that net capital inflows cause the current account deficit. (p. 218)

Current Account Deficit. A rise in the ratio of the current account deficit to GDP is generally associated with large external capital inflows that are intermediated by the domestic financial system and could facilitate asset price and credit booms. A large external current account deficit could signal vulnerability to a currency crisis with negative implications for the liquidity of the financial system, especially if the deficit is financed by short-term portfolio capital inflows. Financial crises that have

Exchange rate represents the external value of a currency. Changes in exchange rates may affect the relative position of a country in the international trade. Politicians and economists concern about exchange rate variability for lots of reasons, among which that the exchange rate variability discourages trade comes first. However, a large empirical literature on this issue does not confirm a significant effect of exchange rate on the volume of trade [1]. Instead other variables such as employment should be much more important from a practical point of view, for it is closely related to people’s livelihood.