Countries' concerns about the value of their currency have been studied and documented extensively in the literature. Capital controls can be—and often are—used as a tool to manage exchange rate fluctuations. This paper investigates whether countries can benefit from using such a tool. We...

International financial linkages, particularly through global bank flows, generate important questions about the consequences for economic and financial stability, including the ability of countries to conduct autonomous monetary policy. I address the monetary autonomy issue in the context of...

The way a country manages its currency can affect its volume of trade, capital flows and income. A country, especially one with high degree of trade openness, needs to find the most suitable exchange rate arrangement to reduce the volatility of its currency value and output. This thesis examines...

This article finds that even in the 1980's, when barriers to international capital mobility had been largely eliminated, there was no measurable tendency for real interest rates between the U.S. and the major industrial countries to converge. Moreover, the estimated short-run responses of both...

This paper presents a general model of the determination of the interest rate and the exchange rate which is relevant for a small economy with any degree of capital mobility. The model is tested by using the quarterly data of Korea and Singapore. The emperical results show that in the Korean...

On the eve of a major change in the world monetary system, the adoption of a single currency in Europe, our theoretical understanding of the implications of the exchange rate regime for trade and capital flows is still limited. We argue that two key model ingredients are essential to address...