The Collapse Of Exchange Rate Regimes

Author : George S. Tavlas
Publisher : Springer Science & Business Media
Page : 247 pages
File Size : 55,8 Mb
Release : 2012-12-06
Category : Business & Economics
ISBN : 9781461562894

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The Collapse of Exchange Rate Regimes by George S. Tavlas Pdf

ical) and to self-fulfilling currency crisis, respectively. Research stressing the former approach was pioneered by Krugman (1979) and Flood and Garber (1984). According to this line of research, the failure of governments to adopt domestic monetary and fiscal policies consistent with their stated exchange rate targets leads to a gradual diminution of reserves and eventually a stock adjustment that depletes reserves suddenly in one attack (Sachs, Tornell, and Velasco, 1996, page 47). The result is either a devaluation of the exchange rate or a switch to floating. Subsequent work of this genre has specified a number of other channels, in addition to that involving inconsistent and unsustainable monetary and fiscal policies, that can precipitate an attack: 1. Inconsistency between external and internal objectives. The stances of monetary and fiscal policies may be consistent with the authorities' exchange rate target, but domestic economic indicators (such as the unemployment rate) may be inconsistent with internal balance, resulting in pressures on the authorities to relax macroeconomic policies. Private agents, aware of this inconsistency, perceive an opportunity for profits from a currency devaluation and precipitate an attack. 2. Contagion effects. Prior to an attack on another currency (say that of country B), the market may view a country's (say, country A's) exchange rate as consistent with economic fundamentals and, thus, sustainable.

Author : Ms.Betty C. Daniel
Publisher : International Monetary Fund
Page : 19 pages
File Size : 52,8 Mb
Release : 1997-10-01
Category : Business & Economics
ISBN : 9781451855456

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Fiscal Policy and the Predictability of Exchange Rate Collapse by Ms.Betty C. Daniel Pdf

It is well known that the long-run viability of a fixed exchange rate regime imposes constraints on monetary policy. This paper shows that, in a model with forward-looking agents, short-run viability imposes a fiscal constraint. When policy change, which destroys long-run viability, also violates the fiscal constraint, collapse is instantaneous. Delayed predictable collapse requires satisfaction of the fiscal constraint.

Author : George S Tavlas
Publisher : Unknown
Page : 256 pages
File Size : 44,7 Mb
Release : 1996-12-31
Category : Electronic
ISBN : 1461562902

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The Collapse of Exchange Rate Regimes by George S Tavlas Pdf

Author : Atish R. Ghosh,Anne-Marie Gulde,Holger C. Wolf
Publisher : MIT Press
Page : 252 pages
File Size : 46,8 Mb
Release : 2002
Category : Business & Economics
ISBN : 0262072408

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Exchange Rate Regimes by Atish R. Ghosh,Anne-Marie Gulde,Holger C. Wolf Pdf

An empirical study of exchange rate regimes based on data compiled from 150 member countries of the International Monetary Fund over the past thirty years. Few topics in international economics are as controversial as the choice of an exchange rate regime. Since the breakdown of the Bretton Woods system in the early 1970s, countries have adopted a wide variety of regimes, ranging from pure floats at one extreme to currency boards and dollarization at the other. While a vast theoretical literature explores the choice and consequences of exchange rate regimes, the abundance of possible effects makes it difficult to establish clear relationships between regimes and common macroeconomic policy targets such as inflation and growth. This book takes a systematic look at the evidence on macroeconomic performance under alternative exchange rate regimes, drawing on the experience of some 150 member countries of the International Monetary Fund over the past thirty years. Among other questions, it asks whether pegging the exchange rate leads to lower inflation, whether floating exchange rates are associated with faster output growth, and whether pegged regimes are particularly prone to currency and other crises. The book draws on history and theory to delineate the debate and on standard statistical methods to assess the empirical evidence, and includes a CD-ROM containing the data set used.

Author : Derek Howard Aldcroft,Michael J. Oliver
Publisher : Unknown
Page : 232 pages
File Size : 46,9 Mb
Release : 1998
Category : Business & Economics
ISBN : STANFORD:36105023217073

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Exchange Rate Regimes in the Twentieth Century by Derek Howard Aldcroft,Michael J. Oliver Pdf

Provides an account of the evolution of exchange rate regimes in the 20th century, in chronological, non-technical format. Links between the past and present shed light on the merits of different exchange rate systems. Discusses forces that have brought about change in order to determine how different regimes affected the economic environment, considers the merits or otherwise of the respective regimes, and assesses arguments for and against fixed and floating exchange ratesAnnotation copyrighted by Book News, Inc., Portland, OR

Author : Mr.Kenneth Rogoff,Mr.Ashoka Mody,Nienke Oomes,Mr.Robin Brooks,Mr.Aasim M. Husain
Publisher : International Monetary Fund
Page : 85 pages
File Size : 41,9 Mb
Release : 2003-12-01
Category : Business & Economics
ISBN : 9781451875843

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Evolution and Performance of Exchange Rate Regimes by Mr.Kenneth Rogoff,Mr.Ashoka Mody,Nienke Oomes,Mr.Robin Brooks,Mr.Aasim M. Husain Pdf

Using recent advances in the classification of exchange rate regimes, this paper finds no support for the popular bipolar view that countries will tend over time to move to the polar extremes of free float or rigid peg. Rather, intermediate regimes have shown remarkable durability. The analysis suggests that as economies mature, the value of exchange rate flexibility rises. For countries at a relatively early stage of financial development and integration, fixed or relatively rigid regimes appear to offer some anti-inflation credibility gain without compromising growth objectives. As countries develop economically and institutionally, there appear to be considerable benefits to more flexible regimes. For developed countries that are not in a currency union, relatively flexible exchange rate regimes appear to offer higher growth without any cost in credibility.

Author : Michael D. Bordo
Publisher : International Monetary Fund
Page : 29 pages
File Size : 49,5 Mb
Release : 2003-08-01
Category : Business & Economics
ISBN : 9781451857764

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Exchange Rate Regime Choice in Historical Perspective by Michael D. Bordo Pdf

In this paper, I survey the issue of exchange rate regime choice from the perspective of both the industrial and emerging economies taking an historical perspective. I first survey the theoretical issues beginning with a taxonomy of regimes. I then examine the empirical evidence on the delineation of regimes and their macroeconomic performance. The penultimate section provides a brief history of monetary regimes in industrial and emerging economies. The conclusion considers the case for a managed float regime for today's emerging economies.

Author : Mr.Atish R. Ghosh,Mr.Jonathan David Ostry,Mr.Charalambos G. Tsangarides
Publisher : International Monetary Fund
Page : 48 pages
File Size : 51,7 Mb
Release : 2011-03-15
Category : Business & Economics
ISBN : 9781589069312

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Exchange Rate Regimes and the Stability of the International Monetary System by Mr.Atish R. Ghosh,Mr.Jonathan David Ostry,Mr.Charalambos G. Tsangarides Pdf

The member countries of the International Monetary Fund collaborate to try to assure orderly exchange arrangements and promote a stable system of exchange rates, recognizing that the essential purpose of the international monetary system is to facilitate the exchange of goods, services, and capital, and to sustain sound economic growth. The paper reviews the stability of the overall system of exchange rates by examining macroeconomic performance (inflation, growth, crises) under alternative exchange rate regimes; implications of exchange rate regime choice for interaction with the rest of the system (external adjustment, trade integration, capital flows); and potential sources of stress to the international monetary system.

Author : Maria Luiza Falcão Silva
Publisher : Routledge
Page : 347 pages
File Size : 46,8 Mb
Release : 2018-08-17
Category : Business & Economics
ISBN : 9780429837203

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Modern Exchange-rate Regimes, Stabilisation Programmes and Co-ordination of Macroeconomic Policies by Maria Luiza Falcão Silva Pdf

Published in 1999, this work analyzes the phenomenon of macroeconomic adjustment, with special emphasis on selected Latin American countries facing stabilization programmes. It provides a historical description of the origins, functioning and collapse of exchange-rate regimes from the international classical gold standard period to modern arrangements. The author supports the argument that systemic asymmetries in the worldwide adjustment mechanism are inherent in the international monetary system. The recent theoretical literature dealing with the rules vs discretion debate and its interaction with the credibility issue is reviewed. This topic is intrinsically related to the dispute over the appropriate role of exchange-rate anchors in disinflation programmes. Against a background of academic dispute between advocates of exchange-rate prescriptions and monetary conceptions, the contrasting views of different theorists regarding the choice of exchange rate regimes are presented and assessed. Finally, a comparative analysis of recent experiments in Argentina, Brazil, Chile and Mexico with exchange-rate based disinflation stabilization programmes is undertaken. The problems that have arisen while establishing new institutional arrangements, such as new currency or a policy rule for monetary base creation, are examined.

Author : Mr.Robert P. Flood,Ms.Nancy P. Marion
Publisher : International Monetary Fund
Page : 9 pages
File Size : 47,6 Mb
Release : 1991-09-01
Category : Business & Economics
ISBN : 9781451851328

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Exchange Rate Regime Choice by Mr.Robert P. Flood,Ms.Nancy P. Marion Pdf

Traditionally the choice of exchange rate regime has been seen as a second-best policy choice, which can be directed toward mitigating the distortionary effects of price or information rigidities. In this paradigm the optimal degree of exchange rate flexibility is found to depend of the source and nature of shocks hitting an economy. More recent literature views the exchange rate as a widely and frequently seen manifestation of government policy with careful exchange-rate management emerging as a tool that can enhance shaky policy credibility.

Author : Gabriel De Kock,Vittorio Grilli
Publisher : Unknown
Page : 64 pages
File Size : 43,6 Mb
Release : 1989
Category : Foreign exchange
ISBN : IND:30000113458065

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Endogenous Exchange Rate Regime Switches by Gabriel De Kock,Vittorio Grilli Pdf

In this paper we demonstrate that exchange rate regime switching is compatible with optimal government policies. Nominal exchange-rate regimes are formalized as equilibrium commitments on future seigniorage policies, and the collapse of an exchange-rate peg as an excusable default which allows the government to lump-sum tax private sector money holdings. We demonstrate that a regime in which the exchange-rate peg is allowed to collapse when government spending is unusually high is a trigger-strategy equilibrium. Such a regime can be superior to both fixed and flexible exchange rate because it combines some of the flexibility of the floating exchange rates with some of the benefits of precommitment afforded by fixed rates.

Author : John Williamson
Publisher : Columbia University Press
Page : 104 pages
File Size : 53,7 Mb
Release : 2007-04-30
Category : Business & Economics
ISBN : 9780881324792

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Reference Rates and the International Monetary System by John Williamson Pdf

Growing global imbalances threaten to induce a collapse of the dollar, which could in turn produce a severe recession in the rest of the world. This crisis could force countries to say "never again" and search for a system to prevent similar disasters. The system that could do so is a reference rate system—where countries' authorities are forbidden from intervening in order to push the exchange rate too far from what is termed the "reference rate." It could help a country's authorities manage its exchange rate to avoid large misalignments, assist the private sector in forming more dependable expectations of future exchange rates and thus to manage their businesses more efficiently in a world of floating exchange rates, and aid the International Monetary Fund in designing and managing an effective system of multilateral surveillance. The world economy would function better as a result, with less chance of the global imbalances leading to a world recession.

Author : Mr.Atish R. Ghosh,Mr.Jonathan David Ostry,MissMahvash Qureshi
Publisher : International Monetary Fund
Page : 46 pages
File Size : 55,6 Mb
Release : 2014-01-24
Category : Business & Economics
ISBN : 9781484383971

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Exchange Rate Management and Crisis Susceptibility by Mr.Atish R. Ghosh,Mr.Jonathan David Ostry,MissMahvash Qureshi Pdf

This paper revisits the bipolar prescription for exchange rate regime choice and asks two questions: are the poles of hard pegs and pure floats still safer than the middle? And where to draw the line between safe floats and risky intermediate regimes? Our findings, based on a sample of 50 EMEs over 1980-2011, show that macroeconomic and financial vulnerabilities are significantly greater under less flexible intermediate regimes—including hard pegs—as compared to floats. While not especially susceptible to banking or currency crises, hard pegs are significantly more prone to growth collapses, suggesting that the security of the hard end of the prescription is largely illusory. Intermediate regimes as a class are the most susceptible to crises, but “managed floats”—a subclass within such regimes—behave much more like pure floats, with significantly lower risks and fewer crises. “Managed floating,” however, is a nebulous concept; a characterization of more crisis prone regimes suggests no simple dividing line between safe floats and risky intermediate regimes.

Author : Anja Zenker
Publisher : Springer Science & Business Media
Page : 142 pages
File Size : 48,6 Mb
Release : 2014-01-08
Category : Business & Economics
ISBN : 9783658048297

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Currency Speculation in Fixed Exchange Rate Regimes by Anja Zenker Pdf

Speculative currency crises seem to have become a common and inevitable phenomenon in the international monetary system. Against this background, various approaches have been developed by economists to cover the broad range of situations in which balance-of-payments crises occurred. Anja Zenker provides a comprehensive insight into the body of theoretical and empirical literature about currency speculation in fixed exchange rate regimes. The author discusses different generations of theoretical models and their empirical relevance in recent currency crises. Moreover, she considers diverse policy options which attempt to avoid speculative attacks on exchange rate pegs.

Author : Michael W. Klein,Jay C. Shambaugh
Publisher : MIT Press
Page : 267 pages
File Size : 40,5 Mb
Release : 2012-08-24
Category : Business & Economics
ISBN : 9780262258333

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Exchange Rate Regimes in the Modern Era by Michael W. Klein,Jay C. Shambaugh Pdf

An analysis of the operation and consequences of exchange rate regimes in an era of increasing international interdependence. The exchange rate is sometimes called the most important price in a highly globalized world. A country's choice of its exchange rate regime, between government-managed fixed rates and market-determined floating rates has significant implications for monetary policy, trade, and macroeconomic outcomes, and is the subject of both academic and policy debate. In this book, two leading economists examine the operation and consequences of exchange rate regimes in an era of increasing international interdependence. Michael Klein and Jay Shambaugh focus on the evolution of exchange rate regimes in the modern era, the period since 1973, which followed the Bretton Woods era of 1945–72 and the pre-World War I gold standard era. Klein and Shambaugh offer a comprehensive, integrated treatment of the characteristics of exchange rate regimes and their effects. The book draws on and synthesizes data from the recent wave of empirical research on this topic, and includes new findings that challenge preconceived notions.