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This paper considers a theoretical model to examine an optimal exchange rate regime for (Asian) emerging market economies that export goods to the U.S., Japan, and neighboring countries. The optimality of the exchange rate regime is defined as minimizing the fluctuation of trade balances, in the...
Persistent link: https://www.econbiz.de/10013228009
The paper offers a new approach to estimate de facto exchange rate regimes, a synthesis of two techniques. One is a technique that the authors have used in the past to estimate implicit de facto weights when the hypothesis is a basket peg with little flexibility. The second is a technique used...
Persistent link: https://www.econbiz.de/10012771832
A new technique for estimating countries' de facto exchange rate regimes synthesizes two approaches. One approach estimates the implicit de facto basket weights in an OLS regression of the local currency value rate against major currency values. Here the hypothesis is a basket peg with little...
Persistent link: https://www.econbiz.de/10013149579
The paper argues that the reason real world fixed exchange rate regimes usually have finite bands instead of completely fixed exchange rates between realignments is that exchange rate bands, counter to the textbook result, give central banks some monetary independence, even with free...
Persistent link: https://www.econbiz.de/10012763458
Using a large sample of developing and industrialized economies during 1970-1999, this paper explores whether the choice of exchange rate regime affects the sensitivity of local interest rates to international interest rates. In most cases, we cannot reject full transmission of international...
Persistent link: https://www.econbiz.de/10013216098
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
We study financial fragility, exchange rate crises and monetary policy in an open economy model in which banks are maturity transformers as in Diamond-Dybvig. The banking system, the exchange rate regime, and central bank credit policy are seen as parts of a mechanism intended to maximize social...
Persistent link: https://www.econbiz.de/10013243429
empirically controversial. We apply theory and empirics to the interwar data and find strong support for the logic of the trilemma …
Persistent link: https://www.econbiz.de/10012755788
-rate theory is the "monetary approach, "Chicago's quantity theory of the open economy; (iii) purchasing power parity is a … precarious reed on which to hang short-term exchange-rate theory; (iv) the current account has just made it back as a determinant …
Persistent link: https://www.econbiz.de/10013322147
We test whether fixed exchange rate regimes are ever credible in emerging markets by analyzing the behavior of short-term domestic trade bills across countries during the classical gold standard period, the most widely used hard peg in modern financial history. We exploit the fact that global...
Persistent link: https://www.econbiz.de/10013150729