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Nikolaus Siegfried

19 December 2007
A recurring theme in recent years in the debate on the international role of currencies has been the possiblity of pricing oil in euro. This paper contributes to these debates by providing a detailed review of the empirical evidence regarding the market for crude oil and current oil invoicing practices. It introduces a network effect model to identify the conditions under which a parallel invoicing in different currencies would be possible. The paper also includes a simulation designed to illustrate the dynamics of the currency choice of oil invoicing.
JEL Code
G14 : Financial Economics→General Financial Markets→Information and Market Efficiency, Event Studies, Insider Trading
O13 : Economic Development, Technological Change, and Growth→Economic Development→Agriculture, Natural Resources, Energy, Environment, Other Primary Products
Q41 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Demand and Supply, Prices
28 September 2007
This paper investigates bond issuance of non-financial corporations in advanced economies during the period 1999-2003, attempting to understand motives for issuing in foreign currency, and determinants for the choice of currency. We consider the following influences on the currency choice when issuing foreign currency denominated debt: the microeconomic characteristics of the firm, the macroeconomic institutional environment and the financial particularities of the bond issue. We find that in addition to cost minimisation, hedging motives and the desire to establish an investor base influences the choice of currency. At the same time, market conventions and regulation also affect the choice.
JEL Code
C25 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Discrete Regression and Qualitative Choice Models, Discrete Regressors, Proportions
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
F23 : International Economics→International Factor Movements and International Business→Multinational Firms, International Business
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
30 October 2006
Workers' remittances have become the second largest source of net financial flows to developing countries. However, the main motives for sending remittances remain controversial. This paper examines the importance of altruistic versus investment motives using a new panel data set of bilateral flows from 21 Western European to 7 EU neighbouring countries. We find that altruism is important for remitting, as the GDP differential between sending and receiving countries is positively correlated with the average remittance per migrant. By contrast, interest rate differentials are insignificant, suggesting a weak investment motive. Finally, migrants' skills raise remittances, while a large informal economy in the sending country depresses official remittance flows.
JEL Code
D13 : Microeconomics→Household Behavior and Family Economics→Household Production and Intrahousehold Allocation
D64 : Microeconomics→Welfare Economics→Altruism, Philanthropy
F22 : International Economics→International Factor Movements and International Business→International Migration
F24 : International Economics→International Factor Movements and International Business→Remittances
O15 : Economic Development, Technological Change, and Growth→Economic Development→Human Resources, Human Development, Income Distribution, Migration
30 June 2005
The Gulf Cooperation Council (GCC) plans to introduce a single currency by 2010 in its six member states, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. This paper focuses on selected macroeconomic and institutional issues and key policy choices which are likely to arise during the process of monetary integration. The main findings are that (i) a supranational GCC monetary institution is required to conduct a single monetary and exchange rate policy geared to economic, monetary and financial conditions in the monetary union as a whole; (ii) GCC member states have already achieved a remarkable degree of monetary convergence, but fiscal convergence remains a challenge and needs to be supported by an appropriate fiscal policy framework; and (iii) there is currently a high degree of structural convergence, although this is expected to diminish in view of the process of diversification in GCC economies, which calls for adequate policy responses.
JEL Code
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy