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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

A Model of the Joint Distribution of Banking and Exchange-Rate Crises

Marion, Nancy P.; Flood, Robert P. - International Monetary Fund (IMF) - 2001

We develop a simple framework for studying the joint distribution of banking and currency crises triggered by real shocks. Our framework illustrates the fact that bank and currency collapses are related but they are not the same thing. Studying currency and bank collapses either in isolation or...

Persistent link: https://www.econbiz.de/10005768974

The Eastern Caribbean Central Bank; Challenges to An Effective Lender of Last Resort

Druck, Pablo; Dehesa, Mario - International Monetary Fund (IMF) - 2008

The paper analyzes the challenges for the Eastern Caribbean Central Bank (ECCB) to be an effective lender of last resort (LOLR) as part of a modern banking crisis resolution framework. The main results from the theoretical model of the ECCB's institutional arrangement are that the majority of...

Persistent link: https://www.econbiz.de/10005769190

International Evidenceon Recovery From Recessions

Cerra, Valerie; Saxena, Sweta Chaman; Panizza, Ugo - International Monetary Fund (IMF) - 2009

Although negative shocks have persistent effects on output on average, this paper shows that macroeconomic policies and the structure of the economy can influence the speed of recovery and mitigate the persistence of the shock. Indeed, monetary and fiscal stimulus and foreign aid can spur a...

Persistent link: https://www.econbiz.de/10008528641

The Pros and Cons of Full Dollarization

Borensztein, Eduardo; Berg, Andrew - International Monetary Fund (IMF) - 2000

We analyze the costs and benefits of full dollarization compared to its closest alternative, a currency board, quantifying for Argentina where possible. Potential advantages include lower borrowing costs and deeper integration into world markets. One cost is the transfer of seigniorage to the...

Persistent link: https://www.econbiz.de/10005605277

Devaluation Expectations and the Stock Market; The Case of Mexico in 1994/1995

Becker, Törbjörn I.; Richards, Anthony J.; Gelos, Gaston - International Monetary Fund (IMF) - 2000

Using company-level data, this paper examines the relative stock-market performance of firms with different foreign-exchange exposures around the time of the 1994/95 Mexican crisis. Contrary to what one might have expected given the alleged peso overvaluation, exporting firms outperformed the...

Persistent link: https://www.econbiz.de/10005605336

Will the Emergence of the Euro Affect World Commodity Prices?

Liang, Hong; Cuddington, John T. - International Monetary Fund (IMF) - 2000

This study provides evidence that episodes of internal stability of exchange rates among the 11 Euro countries during … Euro on January 1, 1999, should be expected to contribute to reduced volatility of world commodity prices, other things …

Persistent link: https://www.econbiz.de/10005263979

Foreign Exchange Market Volatility in Eu Accession Countries in the Run-Up to Euro Adoption; Weathering Uncharted Waters

Székely, István P.; Kóbor, Ãdám - International Monetary Fund (IMF) - 2004

estimation results show not only that volatilities are different between the two regimes but also that some of the cross …

Persistent link: https://www.econbiz.de/10005826312

Establishing Conversion Values for New Currency Unions; Method and Application to the planned Gulf Cooperation Council (GCC) Currency Union

Kamar, Bassem; Carlotti, Jean-Etienne; Krueger, Russell C. - International Monetary Fund (IMF) - 2009

A key issue in creating a new currency union is setting the rates to convert national currencies into the new union currency. Planned unions in the Gulf region and Africa are seeking methods to set the conversion rates when their new currencies are created. We propose a forward-looking...

Persistent link: https://www.econbiz.de/10008528616

The Euroâ€™s Effecton Trade Imbalances

Berger, Helge; Nitsch, Volker - International Monetary Fund (IMF) - 2010

over the period from 1948 through 2008. We find that, with the introduction of the euro, trade imbalances among euro area … tends to be more balanced when nominal exchange rates are flexible. Intra-euro area imbalances also seem to have become more … persistent with the introduction of the euro, some of which is linked to labor market inflexibility. Reviewing the direction of …

Persistent link: https://www.econbiz.de/10008680273