We study the basic economic problem of choice between long-term and short-term commitments under a general characterization of uncertainty (aggregate uncertainty). When contingencies are contractible, a perfect market of Arrow-Debreau contingent claims implements the social optimum. When...

A LOOK AT EXCHANGE RATE AND MONETARY POLICY IN MALAWI* Prepared by K Simwaka Research & Statistics Department Reserve Bank of Malawi Abstract The paper assesses whether the exchange rate is affected by monetary policy and whether these effects are permanent or transitory. The paper takes the...

The paper reviews the recent conduct of monetary policy and the central bank’s rule-based behavior in Russia. Using different policy rules, we test whether the central bank in Russia reacts to changes in inflation, output gap and the exchange rate in a consistent and predictable manner. Our...

Using nonlinear unit root tests developed by Kapetanios et al. (2003), we find strong evidence that the Consumer Price Index (CPI) and Wholesale Price Index (WPI) based Malaysian Ringgit – U.S. Dollar (MYR/USD) real exchange rates are nonlinear stationary, implying that MYR/USD nominal...

Using nonlinear unit root tests developed by Kapetanios et al. (2003), we find strong evidence that the Consumer Price Index (CPI) and Wholesale Price Index (WPI) based Malaysian Ringgit – U.S. Dollar (MYR/USD) real exchange rates are nonlinear stationary, implying that MYR/USD nominal...

The purpose of this paper is to put the future of the US dollar into a logical framework which comprises the global development mechanism. Two models of growth collide: the US «locomotive», based on the international use of the dollar, and which requires exogenous pushes coming permanently...

The purpose of this paper is to review the performance of the monetary policy in Egypt during (1997-2003).Many salient economic lows and decrees were promulgated, such as the law NO 88/2003 on the central bank of Egypt(CBE),the banking system and currency. Also the decree on liberalizing the...

This paper examines the determinants of Uganda’s inflation rate during 1994M7-2005M6. We test the central hypothesis that Uganda’s inflation rate is always and everywhere a non-monetary phenomenon. A theoretical background relating inflation to monetary and other non-monetary factors is...

This paper re-examines the effects of inflation and exchange rate uncertainty on real economic activity. The existent literature has treated both issues as separate subject matters. It has emphasized either the issue of inflation uncertainty or exchange rate uncertainty on economic growth or on...

Exponential Smooth Transition Autoregressive (ESTAR) model is widely adopted in the exchange rate study as its symmetrical distribution matches that of the symmetrical exchange rate adjustment behaviour. In contrast, another specification of STAR model, namely the LSTAR (logistic STAR) model is...