[PDF] Inflation In Fixed Exchange Rate Regimes eBook

Author : Atish R. Ghosh
Publisher : MIT Press
Page : 252 pages
File Size : 27,62 MB
Release : 2002
Category : Business & Economics
ISBN : 9780262072403

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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 : Peter J. Quirk
Publisher : International Monetary Fund
Page : 30 pages
File Size : 39,17 MB
Release : 1994-11-01
Category : Business & Economics
ISBN : 1451855532

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This paper reviews recent experience with the choice of floating or fixed (“anchor”) exchange regimes in industrial and developing countries. It concludes that desirable differences between the two sets of regimes have narrowed, owing to the useful operational role of exchange rate margins and unavoidable medium-term rate adjustments in the context of fixed regimes. A survey of recent empirical cross-country literature also suggests little unambiguous association of the choice of exchange regime with macroeconomic performance, inflation in particular. Stability of the exchange rate has generally been a by-product of other policy choices. Even announcement effects of the regime on inflation-fighting credibility depend on the country-specific assignments of policy instruments to more than one institution--central bank, government, or regional and multilateral institutions.

Author : International Monetary Fund
Publisher : International Monetary Fund
Page : 24 pages
File Size : 30,9 MB
Release : 1996-09-01
Category : Business & Economics
ISBN : 9781557756145

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Although the theoretical relationships are ambiguous, evidence suggestsa strong link between the choice of the exchange rate regime and economicperformance. The paper argues that adopting a pegged exchange rate canlead to lower inflation, but also to slower growth in productivity. Itfinds that on average per capita GDP growth was slightly faster underfloating regimes than under pegged exchange regimes.

Author : Michael W. Klein
Publisher : MIT Press
Page : 267 pages
File Size : 12,32 MB
Release : 2012-08-24
Category : Business & Economics
ISBN : 0262258331

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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.

Author : Mr.Kenneth Rogoff
Publisher : International Monetary Fund
Page : 85 pages
File Size : 11,23 MB
Release : 2003-12-01
Category : Business & Economics
ISBN : 1451875843

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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 : Mr.Christian Ebeke
Publisher : International Monetary Fund
Page : 36 pages
File Size : 10,29 MB
Release : 2015-10-28
Category : Business & Economics
ISBN : 1513599984

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This paper investigates the effects of the adoption of inflation targeting (IT) on the choice of exchange rate regime in emerging markets (EMs), conditional on certain macroeconomic conditions. Using a large sample of EMs and after controlling for the selection bias associated with the adoption of IT, we find that IT countries on average have a relatively more flexible exchange rate regime than other EMs. However, the flexibility of the exchange rate regime shows strong heterogeneity among IT countries depending on their degree of openness and exposure to FX risks. Moreover, we find that the marginal effect of IT adoption on the exchange rate flexibility increases with the duration of the IT regime in place, and with the propensity scores to adopt it.

Author : Ertug Misirli
Publisher :
Page : 94 pages
File Size : 31,78 MB
Release : 2012
Category :
ISBN :

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This thesis revisits the effect of exchange rate regimes on inflation and growth in developing countries under the most recent financial crises. The data used in this paper covers 102 developing countries over the period 1970-2009. This paper finds that developing countries under the fixed exchange rate regime have lower inflation rate compare to those under the flexible exchange rate regime. This negative relationship between fixed regimes and inflation becomes higher in non-emerging markets. Furthermore, empirical findings also indicate that fixed regime is associated with higher economic growth relative to the flexible regime in developing countries. However, this positive relationship between fixed regime and economic growth only remains significant in emerging markets since these countries are more integrated in global financial markets.

Author : Mr.Richard C. Bart
Publisher : International Monetary Fund
Page : 316 pages
File Size : 28,9 MB
Release : 1994-06-01
Category : Business & Economics
ISBN : 9781557753649

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External sector policies and exchange rate policy are central to a country's economic performance and to the IMF's surveillance functions. The papers in this book, edited by Richard Barth and Chorng-Huey Wong, were presented at a seminar on Exchange Rate Policy in Developing and Transition Economies held by the IMF Institute. They analyze choices of exchange rate regimes, issues affecting management of exchange regimes, and specific types of regimes, including case studies from the former Soviet Union, Africa, Asia, and Latin America.

Author : Mr.Yan Sun
Publisher : International Monetary Fund
Page : 32 pages
File Size : 39,60 MB
Release : 2003-04-01
Category : Business & Economics
ISBN : 1451850123

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Conventional wisdom has held that a fixed exchange rate regime induces more fiscal discipline, but Tornell and Velasco (1995, 1998) argue the opposite. Using a dynamic model with fragmented fiscal policymaking, this paper evaluates the two arguments in a single framework and shows that (1) future punishment against fiscal laxity exists under both fixed and flexible regimes; (2) fiscal authorities have a greater incentive to spend more today under fixed rates than under flexible rates; (3) in the presence of both factors above, fixed rates will induce more fiscal discipline only if the future punishment is sufficiently stronger than under flexible rates; and (4) neither fixed nor flexible rates could resolve the structural distortions caused by fragmented policymaking, and fiscal centralization needs to be undertaken to strengthen fiscal discipline.