A multilateral currency union removes the intraregional exchange rates but not the union rate variability with the rest of the world. The intraregional exchange rate variability is thus latent. A two-step procedure is developed to measure the variability. The measured variables are used to model...

Evidence suggests there is a strong tendency among states to choose fixed exchange rates. Yet he interpretation of fixed exchange rates as a monetary policy rule remains unconvincing. Adopting an endogenous policy perspective, this paper argues that political-support maximizing governments...

This work presents an extension of a small open economy DSGE model allowing the transition toward a monetary policy regime aimed at exchange rate stability to be described. The model is estimated using the Bayesian technique to fit the properties of the Czech economy. In the scenarios assessed,...

The main strength of today's international monetary system – its flexibility and adaptability to the different needs of its users – can also become its weakness, as it may contribute to unsustainable growth models and imbalances. The global financial crisis has shown that the system cannot...

Since end-March, 10y US yields have increased 76bp, more than in other G7 markets (Figure 1), and a dollar index relative to major currencies indeed weakened 7.5%, (13.8% relative to developing countries, Figure 2). In this note, we argue that the narrowing of the US current account (CA) deficit...

Recent improvements in statistical methodologies and data availability are facilitating detailed, high-frequency, timely macroeconomic balance sheet analysis. This paper provides practical instruction on how to design the framework to analyze vulnerabilities in a country as well as an overview...

Valuations of currencies and their variability are often noted to have inexplicable aftermaths on international trade, and the overall economic performance. This paper sets to find out empirically, the effects of financial crisis on international trade. We limited our study by focusing on the...

A multilateral currency union removes the intraregional exchange rates but not the union rate variability with the rest of the world. The intraregional exchange rate variability is thus latent. A two-step procedure is developed to measure the variability. The measured variables are used to model...

Most studies of renminbi internationalization focus on the supply side, by examining China's own economic and political conditions. In contrast, this study addresses the demand side of renminbi internationalization, by providing an in-depth analysis of renminbi use in ordinary foreign economies...

During the past decade of mounting global imbalances, many academics and policymakers have argued that the exchange rate of China's Renminbi – perceived by many as intentionally undervalued relative to the U.S. dollar – has contributed to China's substantial trade (and consequent current...