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Author : Ilker Domaç
Publisher : World Bank Publications
Page : 48 pages
File Size : 18,41 MB
Release : 2000
Category : Bank failures
ISBN :
Pursuing a policy of exchange rate stability reduces the probability of banking crises, particularly in developing countries.
Author : Ilker Domac
Publisher :
Page : 42 pages
File Size : 16,7 MB
Release : 2016
Category :
ISBN :
Pursuing a policy of exchange rate stability reduces the probability of banking crises, particularly in developing countries.Domaccedil; and Peria investigate the links between banking crises and exchange rate regimes, using a comprehensive data set that includes developed and developing countries over the last two decades.In particular, they examine whether the choice of exchange rate regime affects the likelihood, cost, and duration of banking crises.Empirical results indicate that adopting a fixed exchange rate diminishes the likelihood of a banking crisis in developing countries. But once a banking crisis occurs, its real costsőin terms of forgone output growth - are higher for countries with more stringent exchange rate requirements.The duration of crises seems not to be affected by exchange rate policy. Instead, it is influenced mainly by the size of the credit boom before the crisis.This paper - a joint product of the Poverty Reduction and Economic Management Sector Unit, Europe and Central Asia Region, and Finance, Development Research Group - is part of a larger effort in the Bank to understand the causes of banking crises. The authors may be contacted at [email protected] or [email protected].
Author : Mr.Atish R. Ghosh
Publisher : International Monetary Fund
Page : 46 pages
File Size : 22,55 MB
Release : 2014-01-24
Category : Business & Economics
ISBN : 1484383974
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 : Louis-Philippe Rochon
Publisher : Edward Elgar Publishing
Page : 304 pages
File Size : 48,57 MB
Release : 2006-01-01
Category : Business & Economics
ISBN : 9781781958674
Combining critical perspectives with a positive contribution to economic policy, both national and international, this book considers the causes and consequences of recent financial crises presenting cutting-edge material.
Author : Eliana Cardoso
Publisher : American Univ in Cairo Press
Page : 362 pages
File Size : 34,1 MB
Release : 2006-02-15
Category : Business & Economics
ISBN : 9789771727590
Monetary Policy and Exchange Rate Regimes: Options for the Middle East examines some of the most pressing issues facing policymakers today. The authors offer answers to such questions as: Are the choices of exchange rate regime limited to hard fixing or fully floating? Are capital flight and banking crises avoidable? What is the best way to coordinate monetary and fiscal policies? The answers to these questions draw on the vast literature available on these topics as well as the lessons learned from recent crises, especially in East Asia and Latin America. Beside its broad coverage, this volume includes rich analyses on specific countries of the Middle East. It merits a wide readership, but policymakers seeking to achieve macroeconomic stability and growth will find it particularly useful.
Author : Lok Sang Ho
Publisher : Springer Science & Business Media
Page : 258 pages
File Size : 22,13 MB
Release : 2011-06-28
Category : Business & Economics
ISBN : 1461510414
The Asian crisis of 1997-1998 was a major influence on macroeconomic thinking concerning exchange rate regimes, the functioning of international institutions, such as the IMF and the World Bank, and international contagion of macroeconomic instability from one country to another. Exchange Rate Regimes and Macroeconomic Stability offers perspectives on these issues from the viewpoints of two Nobel Laureates, an IMF economist, and Asian economists. This book contributes new ideas to the ongoing debate on the role of domestic monetary authorities and international institutions in reducing the likelihood of international financial crises, as well as the problems associated with various exchange rate regimes from the standpoint of macroeconomic stability. Overall, the chapters contained in this volume offer interesting perspectives, which have been stimulated by the recent events in the foreign exchange market. They provide a useful reference for anyone interested in the development of exchange rate regimes, and represent considerable reflection by economists half a century after Bretton Woods.
Author : Ms.Alicia García-Herrero
Publisher : International Monetary Fund
Page : 84 pages
File Size : 49,17 MB
Release : 1997-09-01
Category : Business & Economics
ISBN : 1451854684
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 : Mr.Kenneth Rogoff
Publisher : International Monetary Fund
Page : 85 pages
File Size : 31,46 MB
Release : 2003-12-01
Category : Business & Economics
ISBN : 1451875843
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 : Tim Ebner
Publisher : GRIN Verlag
Page : 67 pages
File Size : 26,52 MB
Release : 2013-02-13
Category : Business & Economics
ISBN : 3656372144
Bachelorarbeit aus dem Jahr 2009 im Fachbereich VWL - Internationale Wirtschaftsbeziehungen, Note: 2,3, Westfälische Wilhelms-Universität Münster (Institut für Internationale Ökonomie), Sprache: Deutsch, Abstract: The occurrence of twin crises can evoke serious recessions. From 1976 to 2002 there were 38 countries afflicted by at least one twin crisis. McKinnon and Pill (1996, 1997, 1998, 1999) set basic milestones in respect of international overborrowing and drew a linkage to twin crises. Their papers are still increasingly cited by current publications. This paper at first systemizes literature on currency, banking and twin crises and gives a review on several contributions. The second section deals with the third generation model of McKinnon and Pill concerning “The Overborrowing Syndrome”. Their key finding is that loan guarantees may lead via excessive borrowing to a twin crisis. After this, policy conclusions to counteract international overborrowing and a review on the development of theoretical overborrowing papers will complete the second section. In section three it will refer to empirical studies on crises and overborrowing. Section four closes with final remarks.
Author : George S. Tavlas
Publisher : Springer Science & Business Media
Page : 247 pages
File Size : 35,65 MB
Release : 2012-12-06
Category : Business & Economics
ISBN : 1461562899
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.