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The paper assesses the extent to which the Group of Seven (G7) has been successful in its management of major currencies since the 1970s. Using an event-study approach, the paper finds evidence that the G7 has been overall effective in moving the U.S. dollar, yen and euro in the intended...
Persistent link: https://www.econbiz.de/10005712534
This paper presents a two-country DSGE model with state-dependent pricing as in Dotsey, King, and Wolman (1999) in … time-dependent pricing. In addition, the predictions of the state-dependent pricing model match the business-cycle moments … better than the predictions of the time-dependent pricing model when driven by monetary policy shocks. …
Persistent link: https://www.econbiz.de/10008611002
Recent papers have argued that one implication of globalization is that domestic inflation rates may have now become more a function of "global," rather than domestic, economic conditions, as postulated by closed-economy Phillips curves. This paper aims to assess the empirical importance of...
Persistent link: https://www.econbiz.de/10005009939
This article argues that high interest rates abroad have substantially depressed private investment in most foreign members of the Group of Seven during the 1990s. Business investment has been especially hard hit and housing construction disrupted, although the effect on housing has been offset...
Persistent link: https://www.econbiz.de/10008456480
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The credibility of the exchange rate bands in the Nordic countries during 1987-91 is examined with two tests. The results suggest that the credibility of Finland’s exchange rate band within a twelve-month horizon could not be rejected except in the fall of 1991; however, the band lacked...
Persistent link: https://www.econbiz.de/10005825696
This paper aims to identify appropriate option contract specifications for effective central bank exchange market intervention. Option contract specifications determine the impact of options on the underlying asset or currency, and hence their actual effect on asset price or currency volatility...
Persistent link: https://www.econbiz.de/10005825716