Download or read book Verifiability and the Vanishing Intermediate Exchange Rate Regime written by Jeffrey A. Frankel and published by . This book was released on 2000 with total page 86 pages. Available in PDF, EPUB and Kindle. Book excerpt: The corners hypothesis holds that intermediate exchange rate regimes are vanishing, or should be. Surprisingly for a new conventional wisdom, this hypothesis so far lacks analytic foundations. In part, the generalization is overdone. We nevertheless offer one possible theoretical rationale, a contribution to the list of arguments against intermediate regimes: they lack verifiability, needed for credibility. Central banks announce intermediate targets such as exchange rates, so that the public can judge from observed data whether they are following the policy announced. Our general point is that simple regimes are more verifiable by market participants than complicated ones. Of the various intermediate regimes (managed float, peg with escape clause, etc.), we focus on basket pegs, with bands. Statistically, it takes a surprisingly long span of data to distinguish such a regime from a floating exchange rate. We apply the econometrics, first, to the example of Chile and, second, by performing Monte Carlo simulations. The amount of data required to verify the declared regime may exceed the length of time during which the regime is maintained. The amount of information necessary increases with the complexity of the regime, including the width of the band and the number of currencies in the basket.

Download or read book Verifiability written by Jeffrey A. Frankel and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper offers a possible theoretical rationale - currently lacking - for the proposition that intermediate exchange rate regimes are no longer viable. According to this proposition, countries are being pushed to the ldquo;corners,rdquo; the extremes of either free floating or firm fixing. We introduce the notion of verifiability, by which we mean the ability of a market participant to infer statistically from observed data that the exchange rate regime announced by the authority is in fact in operation. Verifiability is a means to credibility. Our point is that a simple regime may be more verifiable by market participants than a complicated intermediate regime. We study the verifiability of exchange rate regimes by analyzing the case of Chile and by performing Monte Carlo simulations. Simple pegs and basket pegs are relatively easy to verify. As the case of Chile helps illustrate, a band around a peg makes the verification more difficult. Under a narrow band the weights on the central parity can be estimated correctly. However, wider bands make impossible the verification of the central parity. The amount of data that would be required may well exceed the length of the time period during which a given regime is typically maintained. The Monte Carlo exercise shows that the amount of information necessary to verify the exchange rate regimes increases with the complexity of the regime, including the width of the band and the number of currencies in the basket.

Download or read book Verifying Exchange Rate Regimes written by and published by World Bank Publications. This book was released on 2000 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: One reason intermediate exchange rate regimes have fallen out of favor is that they are not transparent or easy to verify. A simple peg or a simple float may be easier for market participants to verify than a more complicated intermediate regime.

Download or read book Verifiability and the Vanisching Intermediate Exchange Rate Regime written by Jeffrey Alexander Frankel and published by . This book was released on 2000 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Exchange Rate Regimes written by Atish R. Ghosh and published by MIT Press. This book was released on 2002 with total page 252 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Exchange Rate Regimes and Macroeconomic Management in Asia written by Tony Cavoli and published by Hong Kong University Press. This book was released on 2009-06-01 with total page 249 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the rise of China, India and the re-emergence of East Asia from the financial crisis of 1997–98, monetary issues in Asia have acquired great significance as the region holds the largest reserves in the world and consequently plays a major role in the global macro-economy. In addition, there are also a great variety of monetary policy regimes at play in the region – reflecting each country's needs and policy preferences. This volume explores monetary, exchange rate and macroeconomic policies in Asia. A particular question that is analysed is Asia's experience since the crisis with the use of monetary policy to manage the resurgence in capital inflows. It also examines the theoretical and policy issues associated with international capital flows, the increasing degree of integration of financial markets and exchange rates for emerging Asian economies. The book is unique in focussing on China, India and Southeast Asia, rather than just having a sub-regional or country-specific focus. Rigorous empirical analysis is applied to important practical policy issues. The book also provides accessible overviews of recent research relevant to the questions that are explored and is written throughout in a manner that is accessible to policy makers, students and business/financial journalists.

Download or read book Exchange Rate Management and Crisis Susceptibility written by Mr.Atish R. Ghosh and published by International Monetary Fund. This book was released on 2014-01-24 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Exchange Rate Monetary and Financial Issues and Policies in Asia written by Ramkishen S. Rajan and published by World Scientific. This book was released on 2009 with total page 325 pages. Available in PDF, EPUB and Kindle. Book excerpt: A decade has passed since the Asian crisis of 1997OCo1998 which decimated many of the regional economies. While the crisis itself led to severe economic and political consequences, its primary cause was an inappropriate mix of policies, as regional economies attempted to simultaneously maintain fairly rigid exchange rates (soft US dollar pegs) and monetary policy autonomy in the presence of large-scale capital outflows. The chapters in this volume focus on selected exchange rate, monetary and financial issues and policies that are of contemporary relevance and importance to Asia, including choice of exchange rate regimes, causes and consequences of reserve accumulation, international capital flows, macroeconomic synchronization, and regional monetary and financial cooperation.

Download or read book Handbook of Exchange Rates written by Jessica James and published by John Wiley & Sons. This book was released on 2012-05-29 with total page 674 pages. Available in PDF, EPUB and Kindle. Book excerpt: Praise for Handbook of Exchange Rates “This book is remarkable. I expect it to become the anchor reference for people working in the foreign exchange field.” —Richard K. Lyons, Dean and Professor of Finance, Haas School of Business, University of California Berkeley “It is quite easily the most wide ranging treaty of expertise on the forex market I have ever come across. I will be keeping a copy close to my fingertips.” —Jim O’Neill, Chairman, Goldman Sachs Asset Management How should we evaluate the forecasting power of models? What are appropriate loss functions for major market participants? Is the exchange rate the only means of adjustment? Handbook of Exchange Rates answers these questions and many more, equipping readers with the relevant concepts and policies for working in today’s international economic climate. Featuring contributions written by leading specialists from the global financial arena, this handbook provides a collection of original ideas on foreign exchange (FX) rates in four succinct sections: • Overview introduces the history of the FX market and exchange rate regimes, discussing key instruments in the trading environment as well as macro and micro approaches to FX determination. • Exchange Rate Models and Methods focuses on forecasting exchange rates, featuring methodological contributions on the statistical methods for evaluating forecast performance, parity relationships, fair value models, and flow–based models. • FX Markets and Products outlines active currency management, currency hedging, hedge accounting; high frequency and algorithmic trading in FX; and FX strategy-based products. • FX Markets and Policy explores the current policies in place in global markets and presents a framework for analyzing financial crises. Throughout the book, topics are explored in-depth alongside their founding principles. Each chapter uses real-world examples from the financial industry and concludes with a summary that outlines key points and concepts. Handbook of Exchange Rates is an essential reference for fund managers and investors as well as practitioners and researchers working in finance, banking, business, and econometrics. The book also serves as a valuable supplement for courses on economics, business, and international finance at the upper-undergraduate and graduate levels.

Download or read book Handbook of Monetary Economics Vols 3A 3B Set written by Benjamin M. Friedman and published by Newnes. This book was released on 1990 with total page 1729 pages. Available in PDF, EPUB and Kindle. Book excerpt: How have monetary policies matured during the last decade? The recent downturn in economies worldwide have put monetary policies in a new spotlight. In addition to their investigations of new tools, models, and assumptions, they look carefully at recent evidence on subjects as varied as price-setting, inflation persistence, the private sector's formation of inflation expectations, and the monetary policy transmission mechanism. They also reexamine standard presumptions about the rationality of asset markets and other fundamentals. Stopping short of advocating conclusions about the ideal conduct of policy, the authors focus instead on analytical methods and the changing interactions among the ingredients and properties that inform monetary models. The influences between economic performance and monetary policy regimes can be both grand and muted, and this volume clarifies the present state of this continually evolving relationship. Presents extensive coverage of monetary policy theories with an eye toward questions raised by the recent financial crisis Explores the policies and practices used in formulating and transmitting monetary policies Questions fiscal-monetary connnections and encourages new thinking about the business cycle itself Observes changes in the formulation of monetary policies over the last 25 years

Download or read book Issues in Monetary and Fiscal Policy in Small Developing States written by Anthony Birchwood and published by Commonwealth Secretariat. This book was released on 2011-09-23 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines how monetary and fiscal policies are implemented in Caribbean small states, tracing the differences and similarities in tax structure, current expenditure and current revenues. It shows the impact of monetary policy on inflation and the importance of exchange rate regimes to the effectiveness of monetary policy in the region. The authors show that fiscal stabilisation in the region is very low and as such countries within the region would benefit from insurance mechanisms and stabilisation funds.

Download or read book Current Issues in the Design and Conduct of Monetary Policy written by Mr.Mohsin S. Khan and published by International Monetary Fund. This book was released on 2003-03-01 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: Movements in global capital during the late 1990s and the greater emphasis on price stability led many countries to abandon fixed exchange rate regimes and to design institutions and monetary policies to achieve credibility in the goal of lowering inflation. Such recent developments have brought to the forefront the idea that freely mobile capital, independent monetary policy, and fixed exchange rates form an "impossible trinity." It is possible to have two of these policies, but not all three. Inflation-targeting regimes being adopted by many countries provide a way of resolving this dilemma.

Download or read book Brookings Trade Forum 2000 written by Susan M. Collins and published by Brookings Institution Press. This book was released on 2010-12-01 with total page 340 pages. Available in PDF, EPUB and Kindle. Book excerpt: This annual series provides comprehensive analysis on current and emerging issues of international trade and macroeconomics. Practitioners and academics contribute to each volume, with papers that provide an in-depth look at a particular topic. The third edition focuses on policy challenges for the next millennium. Contents include: "Fixing for Your Life" Guillermo Calvo and Carmen Reinhart (University of Maryland) "Verifiability and the Vanishing Intermediate Exchange Rate Regime" Jeffrey Frankel (Harvard University), Sergio Schmukler, and Luis Servén (World Bank) "Short- and Long-Run Integration: Do Capital Controls Matter?" Graciela Kaminsky (George Washington University) and Sergio Schmukler (World Bank) "The Role and Effectiveness of the WTO Dispute Settlement Mechanism" John H. Jackson (Georgetown University) "Regulatory Protectionism, Developing Nations, and a Two-Tier World Trade System" Richard E. Baldwin (Graduate Institute of International Studies) "Trade Policy: What's Next?" W. Bowman Cutter (Warburg Pincus), Richard Haass (Brookings Institution), and Daniel Tarullo (Georgetown University)

Download or read book Working Paper Series written by and published by . This book was released on 2003 with total page 528 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Review of Exchange Arrangements Restrictions and Controls written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2007-11-27 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This review reports on trends, developments, and issues in exchange rate arrangements and currency convertibility. This section presents a summary of the overall findings. Section II provides an overview of key trends and developments in exchange rate arrangements. Section III outlines key trends and developments in current and capital account restrictions. The present paper uses the existing methodology for the classification of exchange rate arrangements.

Download or read book Development Centre Studies Don t Fix Don t Float written by OECD Development Centre and published by OECD Publishing. This book was released on 2001-09-12 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt: Don ́t Fix, Don ́t Float is a book about credibility, or lack thereof. It deals with questions pertaining to international financial architecture from the perspective of developing countries, emerging markets and transition economies.

Download or read book International Currency Arrangements and Policies written by Julius Horváth and published by Nova Publishers. This book was released on 2006 with total page 130 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book deals with exchange rate arrangements and exchange rate policies. Chapter 2 classifies exchange rates into flexible, intermediate and rigid arrangements. The book is subdivided into an arrangement of free float, managed float, pegged but adjustable, target zone, crawling peg, hard peg, currency board, dollarisation, and monetary union. This chapter also discusses hypothesis of vanishing intermediate exchange rate arrangements as well as it deals with differentiation between de jure, and de facto exchange rate arrangements. Chapter 3 deals with the issue of choosing an appropriate exchange rate arrangement. The book briefly characterises basic approaches of how to choose an exchange rate regime. Furthermore, the book reviews considerations stemming from the optimum currency area literature. Chapter 4 deals with problems of exchange rate, which were encountered by the most developed transition countries. After discussing the initial stabilisation problems of the early 1990s, it provides a general overview of the macroeconomic situation and exchange rates arrangements in these countries in the period 1990-2004. Also the book discusses issues connected with the future introduction of the euro into these countries. Chapter 5 provides the reader with two case studies. First, a discussion of the Czech experience in the transition period till the crisis in May 1997 is presented. Second, a discussion of the Hungarian experience concerning banking and exchange rate policy in the 1990s till the early years of this century. Finally, Chapter 6 discusses different historical periods from the viewpoint of currency arrangements.