Search Results - subject:"Fixed exchange rate"

Adjustment to Monetary Policy and Devaluation Under Two-Tier and Fixed Exchange Rate Regimes

Aizenman, Joshua - 2021

The purpose of this paper is to determine whether a two-tier exchange rate regime is more effective than a fixed rate regime in increasing acountry's ability to pursue an independent monetary policy in the short run.The analysis compares adjustment to a monetary policy and to a devaluation in...

Persistent link: https://www.econbiz.de/10013220007

When are Fixed Exchange Rates Really Fixed?

Velasco, Andrés - 2021

This paper analyzes the sustainability of fixed exchange rates by extending the Barro-Gordon framework to a fully dynamic context in which the level of a state variable (in this case debt) determines the payoffs available to the government at each point in time. The model yields the following...

Persistent link: https://www.econbiz.de/10013222968

On the Renminbi : The Choice between Adjustment Under a Fixed Exchange Rate and Adjustment Under a Flexible Rate

Frankel, Jeffrey A. - 2021

Fixed and flexible exchange rates each have advantages, and a country has the right to choose the regime suited to its circumstances. Nevertheless, several arguments support the view that the de facto dollar peg may now have outlived its usefulness for China. (1) China's economy is on the...

Persistent link: https://www.econbiz.de/10013232023

Sterilization and Monetary Control Under Pegged Exchange Rates : Theory and Evidence

Darby, Michael R. - 2021

In veiw of recent strong evidence that substantial sterilization of the monetary effects of reserve flows occurs, a modified monetary approach model is formulated in which central banks exercise no control over their domestic money supply despite their sterilization activities. This model is...

Persistent link: https://www.econbiz.de/10013237279

Fixed Exchange Rates and Trade

Klein, Michael W.; Shambaugh, Jay - 2021

A classic argument for a fixed exchange rate is its promotion of trade. Empirical support for this, however, is mixed … disconnect. Our results, which use a new data-based classification of fixed exchange rate regimes, show a large, significant … effect of a fixed exchange rate on bilateral trade between a base country and a country that pegs to it. Furthermore, the web …

Persistent link: https://www.econbiz.de/10013237597

An Essay on the Revived Bretton Woods System

Dooley, Michael P.; Folkerts-Landau, David; Garber, Peter M. - 2021

The economic emergence of a fixed exchange rate periphery in Asia has reestablished the United States as the center …

Persistent link: https://www.econbiz.de/10013210686

Optimal policy under dollar pricing

Egorov, Konstantin; Mukhin, Dmitry - 2021

Persistent link: https://www.econbiz.de/10013191728

The Mirage of Fixed Exchange Rates

Obstfeld, Maurice; Rogoff, Kenneth - 2021

This paper discusses the profound difficulties of maintaining fixed exchange rates in a world of expanding global capital markets. Contrary to popular wisdom, industrialized-country monetary authorities easily have the resources to defend exchange parities against virtually any private...

Persistent link: https://www.econbiz.de/10013242908

Dual Currency Boards : A Proposal for Currency Stability

Oppers, Stefan Erik - 2021

This paper shows that extending the convertibility guarantee of the traditional currency board to a second reserve currency brings about an automatic, market-driven change of the peg when the initial reserve currency appreciates beyond a specified level. The dual currency board thus maintains...

Persistent link: https://www.econbiz.de/10013317750

An Interest Rate Defense of a Fixed Exchange Rate?

Flood, Robert P.; Jeanne, Olivier - 2021

Defending a government's exchange-rate commitment with active interest rate policy is not an option in the Krugman-Flood-Garber (KFG) model of speculative attacks. In that model, the interest rate is the passive reflection of currency-depreciation expectations. In this paper we show how to adapt...

Persistent link: https://www.econbiz.de/10013317817