Sale-Based Contracts in Islamic Finance: SalamSalam is a sale whereby the seller undertakes to deliver a certain commodity to the buyer at a future date in exchange of the full financial consideration, the price, paid on the spot. This video is…
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Sale-Based Contracts in Islamic Finance: IjaraIjara refers to leasing whereby the ownership of a usufruct of an asset is transferred to another person for a specified period in exchange of a specified consideration known as rent. This video is…
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The Aggregate Demand in an Open EconomyThis chapter focuses on exchange rates and how they impact aggregate demand management in an open economy. It makes use of the C + I + G + (X - M) = GDP formula of the net trade balance in the…
From SDG Academy
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Aggregate Demand with Flexible Exchange RateIn this chapter, Professor Sachs discusses international trade and how it is affected by the exchange rate, which is in turn affected by financial flows and the differences of interest rates at home…
From SDG Academy
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Aggregate Demand with Fixed Exchange RateThis chapter begins by explaining the impact of aggregate demand in an open economy, via fixed and flexible exchange rates. In a fixed or pegged exchange rate, the central bank doesn’t allow…
From SDG Academy
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Stabilization ThemesThis chapter focuses on stabilization, which is the reduction of inflation to a very low level, and explains the tools to understand stabilization. These tools include stabilizing the exchange rate,…
From SDG Academy
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PPP and Interest Rate ArbitrageThis chapter focuses on the purchasing power parity (PPP) and the interest rate arbitrage. Professor Larraín begins by explaining the law of one price, which states that a good must cost the…
From SDG Academy
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The Real Exchange Rate and the Role of Non-Traded GoodsThis chapter discusses the real exchange rate and the role of non-traded goods. The real exchange rate is a measure of a country’s competitiveness, defined through a simple equation. The Big…
From SDG Academy
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Currency CrisesThis chapter focuses on what is behind a currency crisis, which is when the exchange rate depreciates and the local currency loses values. There are three types of models that explain the reason for…
From SDG Academy
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Exchange Rate ArrangementsIn this chapter, Professor Larraín covers the different forms of exchanging arrangements and some real-world cases of collapsing exchanging arrangements, or currency crises. A common case of…
From SDG Academy
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Monetary Policy Under Fixed and Floating Exchange RatesThis chapter discusses monetary policy, and focuses on the difference between fixed and floating exchange rates. It begins by explaining the role that a central bank plays in maintaining its exchange…
From SDG Academy
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