[PDF] Three Essays On Currency Crises And Defensive Monetary Policy eBook

Author : Kemal Burak Bekircan
Publisher :
Page : 238 pages
File Size : 10,73 MB
Release : 2020
Category : Dollar, American
ISBN :

GET BOOK

This dissertation develops three essays on safe haven currency behavior and international monetary interactions. Essay one notes the dramatic appreciation of the U.S. dollar vis-à-vis all world currencies, along with its reversal after a year on the account of the Great Recession. This paper investigates bilateral U.S. dollar exchange rate movements during and in the aftermath of the Great Recession. I find that increasing global market uncertainty has a significant and consistent effect in strengthening of the U.S. dollar. This striking finding suggests flight-to-safety phenomenon of foreign investors, and repatriation of capital flows to the United States by the U.S. investors during and after the last financial crisis. This essay also demonstrates that global investors consider the 3-month and 1-year T-bill, the 5-year T-note, and the 20-year T-bond as the strongest safe haven instruments that can be bought and sold in U.S. dollars. In essay two, it is noted that existing literature assumes that the euro is a safe haven currency but there is no evidence whether it actually behaves as a safe haven. This essay studies the validity of the safe haven hypothesis for the euro. A safe haven currency works as a hedge in the face of extreme market uncertainty. The results of this research imply that the euro is a safe haven currency if the market uncertainty originates in the U.S. market. I show that there is no significant evidence to suggest that the euro serves as a safe haven currency if the uncertainty originates in the Euro-area. From the standpoint of world investors, however, this paper does not find any Euro-area safe haven asset (other than cash) using the EURO STOXX 50 Index as a measure of uncertainty. Essay three studies whether the European Central Bank or the Federal Reserve have an influence on monetary policy implementations of each other and other major industrialized countries since the advent of the euro. I find that the Federal Reserve causes an endogenous monetary policy response in the Euro-area, and in other non-US G7 countries, with the exception of Japan, during the conventional monetary policy period of the post-euro era. I also show that exogenous Euro-area conventional monetary policy innovations cause foreign monetary policy endogeneity in Canada and the UK, but do not cause similar endogeneity in the US and Japan. I define foreign monetary policy endogeneity as the reaction of G7 monetary authorities (that persists for at least two time periods) following a monetary policy innovation of the other. The results of this chapter further reveal that, with respect to the G7 economies, U.S. unconventional monetary policy shocks induce endogenous policy reactions only in Japan during the Great Recession and its aftermath. Unconventional monetary policy innovations by the European Central Bank, instead, lead to a response by the monetary authorities of Japan, the UK, and the US.

Author : Board of Governors of the Federal Reserve System
Publisher :
Page : 0 pages
File Size : 32,85 MB
Release : 2002
Category : Banks and Banking
ISBN : 9780894991967

GET BOOK

Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.

Author : Michael P. Dooley
Publisher : University of Chicago Press
Page : 456 pages
File Size : 44,30 MB
Release : 2007-11-01
Category : Business & Economics
ISBN : 0226155420

GET BOOK

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 : Mr.Stijn Claessens
Publisher : International Monetary Fund
Page : 66 pages
File Size : 35,15 MB
Release : 2013-01-30
Category : Business & Economics
ISBN : 1475561008

GET BOOK

This paper reviews the literature on financial crises focusing on three specific aspects. First, what are the main factors explaining financial crises? Since many theories on the sources of financial crises highlight the importance of sharp fluctuations in asset and credit markets, the paper briefly reviews theoretical and empirical studies on developments in these markets around financial crises. Second, what are the major types of financial crises? The paper focuses on the main theoretical and empirical explanations of four types of financial crises—currency crises, sudden stops, debt crises, and banking crises—and presents a survey of the literature that attempts to identify these episodes. Third, what are the real and financial sector implications of crises? The paper briefly reviews the short- and medium-run implications of crises for the real economy and financial sector. It concludes with a summary of the main lessons from the literature and future research directions.

Author : Massimo Rostagno
Publisher : Oxford University Press
Page : 449 pages
File Size : 48,30 MB
Release : 2021
Category : Business & Economics
ISBN : 0192895915

GET BOOK

The first twenty years of the European Central Bank offer a unique insight into how a central bank can navigate macroeconomic insecurity and crisis. This volume examines the structures and decision-making processes behind the complex measures taken by the ECB to tackle some of the toughest economic challenges in the history of modern Europe.