Monetary Policy In The Aftermath Of Currency Crises

Author : Mr.Taimur Baig,Mr.Ilan Goldfajn
Publisher : International Monetary Fund
Page : 32 pages
File Size : 42,8 Mb
Release : 1998-12-01
Category : Business & Economics
ISBN : 9781451858396

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Monetary Policy in the Aftermath of Currency Crises by Mr.Taimur Baig,Mr.Ilan Goldfajn Pdf

This paper evaluates monetary policy and its relationship with the exchange rate in five Asian crisis countries. The findings are compared with previous currency crises in recent history. The paper finds no evidence of overly tight monetary policy in the Asian crisis countries in 1997 and early 1998, nor evidence that high interest rates led to weaker exchange rates. The usual trade-off between inflation and output when raising interest rates suggested the need for a softer monetary policy in the crisis countries to combat recession. However, in some countries, corporate balance sheet considerations called for the reversal of overly depreciated currencies through firmer monetary policy.

Author : Mr.Ilan Goldfajn,Mrs.Poonam Gupta
Publisher : International Monetary Fund
Page : 33 pages
File Size : 46,6 Mb
Release : 1999-03-01
Category : Business & Economics
ISBN : 9781451846195

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Does Monetary Policy Stabilize the Exchange Rate Following a Currency Crisis? by Mr.Ilan Goldfajn,Mrs.Poonam Gupta Pdf

This paper provides evidence on the relationship between monetary policy and the exchange rate in the aftermath of currency crises. It analyzes a large data set of currency crises in 80 countries for the period 1980-98. The main question addressed is: Can monetary policy increase the probability of reversing a postcrisis undervaluation through nominal appreciation rather than higher inflation? We find that tight monetary policy facilitates the reversal of currency undervaluation through nominal appreciation. When the economy also faces a banking crisis, the results are not robust: depending on the specification, tight monetary policies may not have the same effect.

Author : Mr. Taimur Baig,Mr. Ilan Goldfajn
Publisher : International Monetary Fund
Page : 33 pages
File Size : 51,6 Mb
Release : 1998-12-01
Category : Business & Economics
ISBN : 9781451903645

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Monetary Policy in the Aftermath of Currency Crisis by Mr. Taimur Baig,Mr. Ilan Goldfajn Pdf

This paper evaluates monetary policy and its relationship with the exchange rate in five Asian crisis countries. The findings are compared with previous currency crises in recent history. The paper finds no evidence of overly tight monetary policy in the Asian crisis countries in 1997 and early 1998, nor evidence that high interest rates led to weaker exchange rates. The usual trade-off between inflation and output when raising interest rates suggested the need for a softer monetary policy in the crisis countries to combat recession. However, in some countries, corporate balance sheet considerations called for the reversal of overly depreciated currencies through firmer monetary policy.

Author : Mr.Robert P. Flood,Ms.Nancy P. Marion
Publisher : International Monetary Fund
Page : 52 pages
File Size : 53,7 Mb
Release : 1998-09-01
Category : Business & Economics
ISBN : 9781451855166

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Perspectiveson the Recent Currency Crisis Literature by Mr.Robert P. Flood,Ms.Nancy P. Marion Pdf

In the 1990s, currency crises in Europe, Mexico, and Asia have drawn worldwide attention to speculative attacks on government-controlled exchange rates and have prompted researchers to undertake new theoretical and empirical analysis of these events. This paper provides some perspective on this work and relates it to earlier research. It derives the optimal commitment to a fixed exchange rate and proposes a common framework for analyzing currency crises. This framework stresses the important role of speculators and recognizes that the government’s commitment to a fixed exchange rate is constrained by other policy goals. The final section finds that some crises may be particularly difficult to predict using currently popular methods.

Author : Paul J. Zak
Publisher : Edward Elgar Publishing
Page : 168 pages
File Size : 52,6 Mb
Release : 1999-01-01
Category : Business & Economics
ISBN : 1782543651

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Currency Crises, Monetary Union and the Conduct of Monetary Policy by Paul J. Zak Pdf

Currency Crises, Monetary Union and the Conduct of Monetary Policy is a book of debate and analysis by some of the world's most eminent economists on 'unsolved' problems relating to the international monetary system, economic growth and monetary policy. This volume will be of interest to specialists in international monetary economics, and to undergraduate and graduate students, and members of the general public who seek a clearer understanding of current economic issues and solutions to economic problems.

Author : Michael P. Dooley,Jeffrey A. Frankel
Publisher : University of Chicago Press
Page : 456 pages
File Size : 40,5 Mb
Release : 2007-11-01
Category : Business & Economics
ISBN : 9780226155425

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Managing Currency Crises in Emerging Markets by Michael P. Dooley,Jeffrey A. Frankel Pdf

The management of financial crises in emerging markets is a vital and high-stakes challenge in an increasingly global economy. For this reason, it's also a highly contentious issue in today's public policy circles. In this book, leading economists-many of whom have also participated in policy debates on these issues-consider how best to reduce the frequency and cost of such crises. The contributions here explore the management process from the beginning of a crisis to the long-term effects of the techniques used to minimize it. The first three chapters focus on the earliest responses and the immediate defense of a currency under attack, exploring whether unnecessary damage to economies can be avoided by adopting the right response within the first few days of a financial crisis. Next, contributors examine the adjustment programs that follow, considering how to design these programs so that they shorten the recovery phase, encourage economic growth, and minimize the probability of future difficulties. Finally, the last four papers analyze the actual effects of adjustment programs, asking whether they accomplish what they are designed to do-and whether, as many critics assert, they impose disproportionate costs on the poorest members of society. Recent high-profile currency crises have proven not only how harmful they can be to neighboring economies and trading partners, but also how important policy responses can be in determining their duration and severity. Economists and policymakers will welcome the insightful evaluations in this important volume, and those of its companion, Sebastian Edwards and Jeffrey A. Frankel's Preventing Currency Crises in Emerging Markets.

Author : Ms.Alicia García-Herrero
Publisher : International Monetary Fund
Page : 84 pages
File Size : 53,8 Mb
Release : 1997-09-01
Category : Business & Economics
ISBN : 9781451854688

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Monetary Impact of a Banking Crisis and the Conduct of Monetary Policy by Ms.Alicia García-Herrero Pdf

The experiences of seven countries that have undergone banking crises show that crises have significant implications for the short-run stability of the demand for money, the money multiplier, the transmission mechanism, and the signal variables of monetary policy. Monetary and credit instability, coupled with changes in the nature of the monetary and credit aggregates, complicate monetary management. These findings may require redesigning monetary instruments in favor of faster-reacting instruments, such as open market operations, and introducing additional indicators of the monetary stance, such as asset price and exchange rate movements. More frequent reviews of monetary programs may also be necessary.

Author : B. Rother
Publisher : Springer
Page : 188 pages
File Size : 53,8 Mb
Release : 2009-04-17
Category : Political Science
ISBN : 9780230233645

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The Determinants of Currency Crises by B. Rother Pdf

This book explores the role of political factors in the occurrence of currency crises, using an eclectic approach that blends case studies, a rigorous theoretical discussion, and econometric analysis.

Author : Evan Tanner
Publisher : International Monetary Fund
Page : 60 pages
File Size : 53,8 Mb
Release : 2002
Category : Bank loans
ISBN : UCSD:31822029883220

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Exchange Market Pressure, Currency Crises, and Monetary Policy by Evan Tanner Pdf

Author : R. Rajan
Publisher : Springer
Page : 242 pages
File Size : 52,9 Mb
Release : 2009-03-26
Category : Business & Economics
ISBN : 9780230234192

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Exchange Rates, Currency Crisis and Monetary Cooperation in Asia by R. Rajan Pdf

This book concentrates on exchange rates and their macroeconomic consequences, analytical and empirical issues relating to currency crises and policy responses and monetary and financial cooperation in Asia. It is truely pan-Asia-focused with chapters on China, Japan, Korea, India and Southeast Asia.

Author : Mr.Alfredo Baldini,Mr.Jaromir Benes,Mr.Andrew Berg,Mai Dao,Rafael Portillo
Publisher : International Monetary Fund
Page : 47 pages
File Size : 44,6 Mb
Release : 2012-04-01
Category : Business & Economics
ISBN : 9781475502848

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Monetary Policy in Low Income Countries in the Face of the Global Crisis by Mr.Alfredo Baldini,Mr.Jaromir Benes,Mr.Andrew Berg,Mai Dao,Rafael Portillo Pdf

We develop a DSGE model with a banking sector to analyze the impact of the financial crisis on Zambia and the role of the monetary policy response. We view the crisis as a combination of three related shocks: a worsening in the terms of the trade, an increase in the country’s risk premium, and a decrease in the risk appetite of local banks. We characterize monetary policy as "stop and go": initially tight, subsequently loose. Simulations of the model broadly match the path of the economy during this period. We find that the initial policy response contributed to the domestic impact of the crisis by further tightening financial conditions. We study the factors driving the "stop" part of policy and derive policy implications for central banks in low-income countries.

Author : Franklin Allen,Douglas Gale
Publisher : OUP Oxford
Page : 320 pages
File Size : 43,5 Mb
Release : 2009-04-02
Category : Business & Economics
ISBN : 9780191622861

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Understanding Financial Crises by Franklin Allen,Douglas Gale Pdf

What causes a financial crisis? Can financial crises be anticipated or even avoided? What can be done to lessen their impact? Should governments and international institutions intervene? Or should financial crises be left to run their course? In the aftermath of the Asian financial crisis, many blamed international institutions, corruption, governments, and flawed macro and microeconomic policies not only for causing the crisis but also unnecessarily lengthening and deepening it. Based on ten years of research, the authors develop a theoretical approach to analyzing financial crises. Beginning with a review of the history of financial crises and providing readers with the basic economic tools needed to understand the literature, the authors construct a series of increasingly sophisticated models. Throughout, the authors guide the reader through the existing theoretical and empirical literature while also building on their own theoretical approach. The text presents the modern theory of intermediation, introduces asset markets and the causes of asset price volatility, and discusses the interaction of banks and markets. The book also deals with more specialized topics, including optimal financial regulation, bubbles, and financial contagion.

Author : International Monetary Fund. Research Dept.
Publisher : International Monetary Fund
Page : 260 pages
File Size : 53,7 Mb
Release : 2002-09-23
Category : Business & Economics
ISBN : 1589061225

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IMF Staff Papers, Volume 49, No. 3 by International Monetary Fund. Research Dept. Pdf

This paper empirically investigates the monetary impact of banking crises in Chile, Colombia, Denmark, Japan, Kenya, Malaysia, and Uruguay during 1975–98. Cointegration analysis and error correction modeling are used to research two issues: (i) whether money demand stability is threatened by banking crises; and (ii) whether crises lead to structural breaks in the relation between monetary indicators and prices. Overall, no systematic evidence that banking crises cause money demand instability is found. The paper also analyzes inflation targeting in the context of the IMF-supported adjustment programs.

Author : Deepak Mishra,Mrs.Poonam Gupta,Ms.Ratna Sahay
Publisher : International Monetary Fund
Page : 38 pages
File Size : 44,5 Mb
Release : 2003-11-01
Category : Business & Economics
ISBN : 9781451875522

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Output Response to Currency Crises by Deepak Mishra,Mrs.Poonam Gupta,Ms.Ratna Sahay Pdf

This paper analyzes the behavior of output during currency crises using a sample of 195 crisis episodes in 91 developing countries during 1970-98. It finds that more than two-fifths of the crises in the sample were expansionary, and that output contraction was greater in large and more developed economies than in small and less developed economies. Currency crises have not been any more contractionary in the 1990s than in the previous two decades. Countries that traded less with the rest of the world, that had a relatively open capital account, and where crises were preceded by large capital inflows were more likely to be associated with contraction during crises. The contraction was more pronounced if trade competitors devalued, oil prices rose during the crisis, and postcrisis period was marked by tight monetary policy and expansionary fiscal policy.

Author : Sylvester C. W. Eijffinger,Benedikt Goderis
Publisher : Unknown
Page : 0 pages
File Size : 40,8 Mb
Release : 2007
Category : Currency crises
ISBN : OCLC:1405950288

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The Effect of Monetary Policy on Exchange Rates During Currency Crises by Sylvester C. W. Eijffinger,Benedikt Goderis Pdf