Accumulating Foreign Reserves Under Floating Exchange Rates

Official accumulation of foreign reserves may be perceived as interventions to influence the exchange rate, undermining the credibility of floating exchange rates and inflation targets. This paper develops a theoretical framework to study the interaction between reserve accumulation and monetary policy. The model uncovers a trade-off between the speed of reserve accumulation and anti-inflationary credibility. Under reasonable assumptions, delegation of intervention and monetary policy decisions to separate government agencies allows faster reserve accumulation, while centralization of these de

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Year of publication:	2008
Authors:	Gonçalves, Fernando M.
Publisher:	Washington : International Monetary Fund
Subject:	Theorie \| Theory \| Währungsreserven \| Foreign exchange reserves \| Flexibler Wechselkurs \| Flexible exchange rate \| Wechselkurspolitik \| Exchange rate policy

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Extent:	Online-Ressource (43 p)
Series:	IMF Working Papers
Type of publication:	Book / Working Paper
Language:	English
Notes:	Description based upon print version of record Contents; 1. Introduction; 2. Theoretical Model: Basic Set-up; 3. Complete Information; 3.1. Centralization; 3.2. Institutional Arrangements in Practice; 3.3. Separation; 3.4. Centralization versus Separation; 4. Incomplete Information; 4.1. Stage 1: Centralization versus Separation; Figures; 1. Timetable; 4.2. Stage 0: Centralization versus Separation; 5. Comparative Analysis Under Incomplete Information; 5.1. Simulation of Stage 0 Parameters; 2. Simulation of Stage 0 Parameters; 5.2. The Trade-off Between Reserve Accumulation and Credibility Building; 5.3. Centralization versus Separation 5.3.1. Macroeconomic Stability3. Macroeconomic Stability - Centralization versus Separation; 5.3.2. Reserve Targeting; 4. Reserve Targeting - Centralization versus Separation; 5.3.3. Discussion; 6. Concluding Remarks; References; Appendix; Proof of Proposition 1; Proof of Corollary 1
ISBN:	978-1-4518-6957-6 ; 978-1-4519-1411-5 ; 978-1-4518-6957-6
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012677568