Since 1998, the staff of the International Monetary Fund has published a classification of countries' de facto exchange rate arrangements. Experience in operating this classification system has highlighted a need for changes. The present paper provides information on revisions to the system in...

A puzzle in international macroeconomics is that observed real exchange rates are highly volatile. Standard international real business cycle (IRBC) models cannot reproduce this fact. We show that TFP processes for the U.S. and the "rest of the world," is characterized by a vector error...

In this paper we first explain why most microstates (countries with less than 2 million inhabitants) have gained independence only in the last 30 years. Despite the higher costs and risks microstates face, their ability to better accommodate local preferences combined with a more integrated...

Currency Board Arrangements (CBAs) are currently advocated as a super-fixed exchange rate solution to exchange rate volatility. This paper examines the operation, benefits and disadvantages of CBAs. Benefits comprise improved policy credibility, lower inflation, increased economic growth,...

Monetary policy and foreign exchange intervention reaction functions are estimated for Zambia over the period 1995.01-2008.12 using GMM to determine the extent to which the central bank takes into account in its policy decisions, output and inflation deviations from trend and target as well as...

The eight real kwacha bilateral exchange rates examined over the period 1968- 2008 in a GARCH framework are characterised by different conditional volatility dynamics. Evidence of asymmetric response to shocks suggests asymmetric central bank reaction to variations in volatility in exchange...

Using data on 17 industrial countries from 1982 to 2003 and controlling for a wide array of factors, this paper finds that higher exchange rate volatility increases the unemployment rate. The magnitude of the effect is small. The results are robust to variations in specification.

This paper aims to quantify the impact of nominal exchange rate volatility on nominal trade flows with a particular focus on the Czech Republic. The paper shows that the magnitude of the impact differs when a dynamic model is used instead of static model.

The main Purpose of this paper is to investigate the impact of monetary regime and exchange rate volatility on the exchange rate pass-through in two subsets of countries with the inflation targeting versus exchange rate as nominal anchor over the period of 1999-2010. To conduct this study, the...

Intermediate goods are often neglected in the empirical studies of the impact of exchange rate volatility on bilateral trade flows. Using import unit values of 58 motor vehicle products and 193 auto-parts, which are classified by the 10-digit level of Harmonized Tariff Schedule (HTS), this study...