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Optimal and Sustainable Exchange Rate Regimes; A Simple Game-Theoretic Approach

Kawai, Masahiro - International Monetary Fund (IMF) - 1992

This paper examines the question of how to design an optimal and sustainable exchange rate regime in a world economy of two interdependent countries. It develops a Barro-Gordon type two-country model and compares noncooperative equilibria under different assumptions of monetary policy...

Persistent link: https://www.econbiz.de/10005264066

Real Exchange Rate Volatility and the Price of Nontradables in Sudden-Stop-Prone Economies

Mendoza, Enrique G. - International Monetary Fund (IMF) - 2006

This paper shows that the dominant view that the high variability of real exchange rates is due to movements in exchange rate-adjusted prices of tradable goods does not hold for Mexican data for periods with a managed exchange rate. The relative price of nontradables accounts for up to 70...

Persistent link: https://www.econbiz.de/10005264110

Capital Inflows, Exchange Rate Flexibility, and Credit Booms

Magud, Nicolas E.; Vesperoni, Esteban; Reinhart, Carmen - International Monetary Fund (IMF) - 2012

The prospects of expansionary monetary policies in the advanced countries for the foreseeable future have renewed the debate over policy options to cope with large capital inflows that are, at least partly, driven by low interest rates in the financial centers. Historically, capital flow...

Persistent link: https://www.econbiz.de/10009654160

Keynes, Cocoa, and Copper; In Search of Commodity Currencies

Sahay, Ratna; Céspedes, Luis Felipe; Cashin, Paul - International Monetary Fund (IMF) - 2002

This paper examines whether the real exchange rates of commodity-exporting countries and the real prices of their commodity exports move together over time. Using IMF data on the world prices of 44 commodities and national commodity export shares, we construct new monthly indices of national...

Persistent link: https://www.econbiz.de/10005825719

Tunisia's Experience with Real Exchange Rate Targeting and the Transition to a Flexible Exchange Rate Regime

International Monetary Fund (IMF); International … - 2002

Over the past decade or so, Tunisia has experienced a strong economic performance while pursuing a constant real exchange rate rule (CRERR). The limitations of this rule are now beginning to emerge in the context of a more open economy, regional integration, a more market-based monetary policy,...

Persistent link: https://www.econbiz.de/10005826081

Balance Sheets, Exchange Rate Policy, and Welfare

Elekdag, Selim; Tchakarov, Ivan - International Monetary Fund (IMF) - 2004

The debate about the appropriate choice of exchange rate regime is fundamental in international economics. This paper develops a small open-economy model with balance sheet effects and compares the performance of fixed and flexible exchange rate regimes. The model is solved up to a second-order...

Persistent link: https://www.econbiz.de/10005826482

Exchange Rate Regime Considerations for Jordan and Lebanon

Bhattacharya, Rina - International Monetary Fund (IMF) - 2003

This paper addresses the issue of the appropriate exchange rate regimes for Jordan and Lebanon in the context of the literature on optimum currency areas and the arguments concerning the use of the exchange rate as a nominal anchor for the economy. It presents some empirical results on the...

Persistent link: https://www.econbiz.de/10005768808

Currency Boards, Credibility, and Macroeconomic Behavior

Sy, Amadou N. R.; Rivera-Batiz, Luis - International Monetary Fund (IMF) - 2000

Currency boards operate differently from standard pegs. The former exhibit greater currency stability and lower transaction costs, inflation, and nominal interest rates, but are limited in their use of devaluation. We extend Drazen and Masson’s (1994) signaling model to consider the choice...

Persistent link: https://www.econbiz.de/10005768949

Exchange Rates in the Periphery and International Adjustment Under the Gold Standard

Catão, Luis; Solomou, Solomos - International Monetary Fund (IMF) - 2003

builds a new dataset on trade-weighed exchange rates for the period 1870-1913 and finds that large currency movements in … exchange rates worldwide. We relate the phenomenon to the international trade structure at the time and show that such currency … fluctuations had powerful effects on trade flows. We conclude that nominal exchange rate flexibility in the periphery was an …

Persistent link: https://www.econbiz.de/10005769107

Evolution and Performance of Exchange Rate Regimes

Husain, Aasim M.; Mody, Ashoka; Oomes, Nienke; Brooks, Robin - International Monetary Fund (IMF) - 2003

Using recent advances in the classification of exchange rate regimes, this paper finds no support for the popular bipolar view that countries will tend over time to move to the polar extremes of free float or rigid peg. Rather, intermediate regimes have shown remarkable durability. The analysis...

Persistent link: https://www.econbiz.de/10005599274