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Fixed Exchange Rates with Escape Clauses : The Political Determinants of the European Monetary System Realignments
Bodea, Cristina - 2017
This paper studies the political economy of realignments to fixed exchange rates and suggests that the use of realignments is less likely when there are political benefits from stable exchange rates and when linkages across other issue areas increase the costs of realignment. More specifically...
Persistent link: https://www.econbiz.de/10012958734
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Monetary Policy Divergence, Net Capital Flows, and Exchange Rates : Accounting for Endogenous Policy Responses
Davis, Scott - 2017
This paper measures the effect of monetary tightening in key advanced economies on net capital flows and exchange rates around the world. Measuring this effect is complicated by the fact that the domestic monetary policies of affected economies respond endogenously to the foreign tightening...
Persistent link: https://www.econbiz.de/10012943447
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The Global Factor in Neutral Policy Rates : Some Implications for Exchange Rates, Monetary Policy, and Policy Coordination
Clarida, Richard - 2018
with international spill overs so that in theory there can be gains to international policy cooperation. In this richer … countries. We argue that in practice, there could well be significant costs to central bank communication and credibility under …
Persistent link: https://www.econbiz.de/10012914920
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Beliefs About Exchange-Rate Stability : Survey Evidence from the Currency Board in Bulgaria
Carlson, John A.; Valev, Neven T. - 2004
We use unique survey data from Bulgaria's currency board to examine the reasons for persistent incomplete credibility … since 1997, the currency board has not achieved full credibility. This is not uncommon in other less-developed countries … with fixed exchange rate regimes. Our results reveal that incomplete credibility is explained primarily by concerns about …
Persistent link: https://www.econbiz.de/10014070959
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The portfolio theory of inflation and policy (in)effectiveness revisited : corroborating evidence
Bossone, Biagio; Cuccia, Andrea - 2020
This study revisits and tests empirically the Portfolio Theory of Inflation (PTI), which analyzes how the effectiveness … (Bossone, The portfolio theory of inflation and policy (in)effectiveness, 2019). The PTI shows that when an economy is heavily …
Persistent link: https://www.econbiz.de/10012140238
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The Danish problem
Eichengreen, Barry - 2023
Specialists in international finance have long been impressed by the fragility of currency pegs. Yet Danmarks Nationalbank has been able to maintain the krone's peg to the euro since the euro came into existence in 1999, and the krone's peg to the Deutschmark and SDR for 17 years before that....
Persistent link: https://www.econbiz.de/10014231829
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India's trilemma : financial liberalization, exchange rates and monetary policy
Hutchison, Michael M.; Sengupta, Rajeswari; Singh, Nirvikar - 2010
A key challenge for macroeconomic policy in open economies is how to simultaneously manage exchange rates, interest rates and capital account openness - the trilemma. This paper calculates a trilemma index for India and investigates its evolution over time. We find that financial integration has...
Persistent link: https://www.econbiz.de/10008698332
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Does a Big Bazooka Matter? Central Bank Balance-Sheet Policies and Exchange Rates
Dedola, Luca - 2020
We estimate the effects of quantitative easing (QE) measures by the ECB and the Federal Reserve on the US dollar-euro exchange rate at frequencies and horizons relevant for policymakers. To do so, we derive a theoretically-consistent local projection regression equation from the standard asset...
Persistent link: https://www.econbiz.de/10012850831
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Does a Big Bazooka Matter? Central Bank Balance-Sheet Policies and Exchange Rates
Dedola, Luca; Georgiadis, Georgios; Gräb, Johannes; … - 2021
We estimate the effects of quantitative easing (QE) measures by the ECB and the Federal Reserve on the US dollar-euro exchange rate at frequencies and horizons relevant for policymakers. To do so, we derive a theoretically-consistent local projection regression equation from the standard asset...
Persistent link: https://www.econbiz.de/10013315385
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Realignment Expectations, Forward Rate Bias, and Sterilized Intervention in an Adjustable Peg Exchange Rate Model with Policy Optimization
Isard, Peter - 1994
The paper models an adjustable peg exchange rate arrangement as a policy rule with an escape clause under which the timing and magnitudes of realignments are the outcomes of policy optimization decisions. Under the assumptions that market participants are rational, risk averse, and fully...
Persistent link: https://www.econbiz.de/10014395996