Testing Four Types of Bubbles in BRICS Exchange Rates

Maldonado, Wilfredo L.; Ribeiro, Jussara; Tourinho, Octávio Augusto Fontes

doi:10.1080/1540496x.2019.1603542

Cited by 5 publications

(4 citation statements)

References 46 publications

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“…The US move to use the dollar as a tool to pressure other countries is currently sparking an international reaction to reduce its dependence on the dollar, as have Russia and China, two of the United States' international rivals (Maldonaldo, Ribeiro & Tourinho, 2019). After several years of negotiations between Russia and China to set aside US dollars as a medium of trade exchange, the two countries agreed to reduce the use of the dollar in the first quarter of 2020 to less than 50 percent for the first time.…”

Section: Fall Of the Dollarmentioning

confidence: 99%

“…Moscow and Beijing believe that using the dollar by the US to attack other countries, although it can achieve Washington's goals in the short term, its implementation in the long term will be detrimental to the United States (Malkin, 2019). It seems that the move by the coalition of Russia and China as the two most important political and economic powers in the world will encourage other countries to follow the same pattern, thereby significantly reducing the role of the dollar in the global monetary system (Maldonaldo, Ribeiro & Tourinho, 2019).…”

Section: Fall Of the Dollarmentioning

confidence: 99%

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Transition to A True Currency: Impact of COVID-19 on The World Currency System

Alamsyah¹,

Juliana²

2021

JKPIs

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The purpose of this paper is to manifest the unrefined design of the transition of the currency system from centralized fiat money based on the US Dollar to the real currency system that relies on the precious metals-based currency after reviewing the rapid changes from the COVID-19 phenomenon to various sectors of life, including the currency system. This paper used qualitative research with a historical analysis approach or historiography that deals with precious metals-based currency in the pastime, and it is used to produce relevant analyses for the future. First, states that prefer to transition to a precious metals-based currency ought to combine them in a single political institution that can provide a strong bargaining position in politics. Second, they have to withdraw gold reserves from the major central banks by making a trade balance surplus paid only in precious metals. Third, at this transitional stage, the use of oil reserves as a political economy of energy to withdraw gold reserves at the major central banks and the issuance of money is temporary until the state is fully stable and a new wave of gold reserves begin to enter. The underlying study will provide a comprehensive analysis of the currency system scheme in this modern era. Previous works have only focused on the superior aspects of the precious metals-based system and criticisms of the fiat money system, without detailing the steps to supersede the fiat money-based system. This paper used qualitative research with a historical analysis approach or historiography. It attempted to fill this glaring gap and expected to produce a study for implementation within the state scope.

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Section: Fall Of the Dollarmentioning

confidence: 99%

Section: Fall Of the Dollarmentioning

confidence: 99%

Transition to A True Currency: Impact of COVID-19 on The World Currency System

Alamsyah¹,

Juliana²

2021

JKPIs

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“…There is also vast literature on bubble detection and estimation in currency markets. This list includes the papers of Evans (1986), Maldonado et al (2019), Meese (1986), and Pavlidis et al (2017) in favor of bubble existence, and West (1987), Wu (1995), and Bettendorf and Chen (2013) against the presence of bubbles in foreign exchange markets. Among these papers, Jirasakuldech et al (2006) find nonexplosiveness in GDPUSD, USDCAD, USDDKK, USDJPY, and USDZAR at a monthly frequency using unit root, cointegration, and duration tests during the sample period 1989-2004.…”

Section: Introductionmentioning

confidence: 99%

Identification of Multiple Bubbles in Turkish Financial Markets: Evidence From Gsadf Approach

Gök

2021

Marmara Üniversitesi İktisadi Ve İdari Bilimler Dergisi

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This study examines the explosive behavior in the five local market prices of stock indices (in USD and TRY), bond, CDS, gold, and currency exchange rate of USDTRY at weekly observations over the sample period between 2005 and 2021. We find strong evidence of bubble formations in bond, gold, and currency markets during the crisis (financial and pandemic, such as ongoing COVID-19 outbreak) and non-crisis periods. The findings show both unidirectional and bidirectional causal linkages under the homoscedasticity and heteroscedasticity assumptions. Additionally, the causation is most pronounced under the homoscedastic model between the currency market with the CDS, gold, and stock markets.

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“…Maldonado, Tourinho, and De Abreu (2018) also found that there was a co-integration relationship between exchange rate bubbles in "BRICS" countries. On the other hand, Maldonado, Ribeiro, and Tourinho (2019) discussed four types of exchange rate bubbles in "BRICS" countries, but detected that Chinese exchange rate did not have multiple bubbles by using the GSADF approach.…”

Section: Introductionmentioning

confidence: 99%

Do the Renminbi and Hong Kong dollar bubbles interact?

Cheng

et al. 2020

Int. J Fin Econ

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This paper applies the Generalized Supremum Augmented Dickey-Fuller (GSADF) approach to highlight the multiple exchange rate bubbles, and detect the interaction between Renminbi (RMB) and Hong Kong dollar (HKD) by logistic regression. The results illustrate that (I) there exists multiple bubbles in the RMB and HKD, and both shows the short-term period bubbles in the nominal exchange rates whereas performing the long-term period bubbles in the real exchange rates; (II) the exchange rate bubbles mainly existed during the financial crisis. The RMB bubbles occurred more in domestic financial crisis, while the HKD bubbles occurred in both domestic and international financial crisis; (III) there are interactions between bubbles in the RMB and HKD. Specifically, the bubbles in the nominal exchange rates of the RMB and HKD are reinforcing each other while the bubbles in the real exchange rates markets are mutually hedging; the nominal and real exchange rate market are mutually reinforcing regardless of the RMB or HKD. Furthermore, the strength of interactions between the RMB and HKD shows that the price of the HKD is more stable than that of the RMB.

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Testing Four Types of Bubbles in BRICS Exchange Rates

Cited by 5 publications

References 46 publications

Transition to A True Currency: Impact of COVID-19 on The World Currency System

Transition to A True Currency: Impact of COVID-19 on The World Currency System

Identification of Multiple Bubbles in Turkish Financial Markets: Evidence From Gsadf Approach

Do the Renminbi and Hong Kong dollar bubbles interact?

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