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A DSGE model for a SOE with systematic interest and foreign exchange policies in which policymakers exploit the risk premium for stabilization purposes
Escudé, Guillermo J. - 2013
This paper builds a DSGE model for a small open economy (SOE) in which the central bank intervenes the domestic currency bond and FX markets using two policy rules: a Taylor-type rule and a rule that determines the rate of nominal depreciation. The 2 'corner' regimes, in which only one policy...
Persistent link: https://www.econbiz.de/10009769223
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The possible trinity : optimal interest rate, exchange rate, and taxes on capital flows in a DSGE model for a small open economy
Escudé, Guillermo J. - 2014
A traditional way of thinking about the exchange rate (XR) regime and capital account openness has been framed in terms of the 'impossible trinity' or 'trilemma', in which policymakers can only have 2 of 3 possible outcomes: open capital markets, monetary independence and pegged XRs. This paper...
Persistent link: https://www.econbiz.de/10010370928
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A DSGE model for a SOE with systematic interest and foreign exchange policies in which policymakers exploit the risk premium for stabilization purposes
Escudé, Guillermo J. - In: Economics - The Open-Access, Open-Assessment E-Journal 7 (2013), pp. 1-110
This paper builds a DSGE model for a small open economy (SOE) in which the central bank intervenes the domestic currency bond and FX markets using two policy rules: a Taylor-type rule and a rule that determines the rate of nominal depreciation. The 2 'corner' regimes, in which only one policy...
Persistent link: https://www.econbiz.de/10010954740
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The possible trinity: Optimal interest rate, exchange rate, and taxes on capital flows in a DSGE model for a small open economy
Escudé, Guillermo J. - In: Economics - The Open-Access, Open-Assessment E-Journal 8 (2014), pp. 1-58
A traditional way of thinking about the exchange rate (XR) regime and capital account openness has been framed in terms of the 'impossible trinity' or 'trilemma', in which policymakers can only have 2 of 3 possible outcomes: open capital markets, monetary independence and pegged XRs. This paper...
Persistent link: https://www.econbiz.de/10010954790