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Author: Pierre-Richard Agénor
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
Exchange rate reforms in developing countries have often aimed at floating the exchange rate in an attempt to unify the official and parallel markets for foreign exchange. This paper examines the anticipatory dynamics associated with such reforms. The analysis shows that if the future unified exchange rate is more depreciated than the prevailing official rate, a pre - announced reform will lead to a depreciation of the parallel rate upon announcement and, during the transition period, a rising premium, an increase in the rate of reserve losses, and possibly to an output contraction and an appreciation of the real exchange rate.
Author: Pierre-Richard Agénor
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 42
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Book Description
Exchange rate reforms in developing countries have often aimed at floating the exchange rate in an attempt to unify the official and parallel markets for foreign exchange. This paper examines the anticipatory dynamics associated with such reforms. The analysis shows that if the future unified exchange rate is more depreciated than the prevailing official rate, a pre - announced reform will lead to a depreciation of the parallel rate upon announcement and, during the transition period, a rising premium, an increase in the rate of reserve losses, and possibly to an output contraction and an appreciation of the real exchange rate.
Author: Pierre-Richard Agénor
Publisher:
ISBN:
Category :
Languages : en
Pages : 24
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Book Description
Author: Pierre-Richard Agenor
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
Exchange rate reforms in developing countries have often aimed at floating the exchange rate in an attempt to unify the official and parallel markets for foreign exchange. This paper examines the anticipatory dynamics associated with such reforms. The analysis shows that if the future unified exchange rate is more depreciated than the prevailing official rate, a pre-announced reform will lead to a depreciation of the parallel rate upon announcement and, during the transition period, a rising premium, an increase in the rate of reserve losses, and possibly to an output contraction and an appreciation of the real exchange rate.
Author: United States. Congress. House. Committee on Banking, Currency, and Housing. Subcommittee on International Trade, Investment and Monetary Policy
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 16
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Book Description
Author: Sebastian Edwards
Publisher: University of Chicago Press
ISBN: 0226184730
Category : Business & Economics
Languages : en
Pages : 460
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Book Description
In spite of the attention paid exchange rates in recent economic debates on developing countries, relatively few studies have systematically analyzed in detail the various ramifications of exchange rate policy in these countries. In this new volume from the National Bureau of Economic Research, leading economists use rigorous models to tackle various exchange rate issues, while also illuminating policy implications that emerge from their analyses. The volume, divided into four main sections, addresses: the role of exchange rates in stabilization programs and the adjustment process; the importance of exchange rate policy during liberalization reform in developing countries; exchange rate problems relevant and unique to developing countries, illustrated by case studies; and the problems defining, measuring, and identifying determinants of real exchange rates. Authors of individual papers examine the relation between commercial policies and exchange rates, the role of exchange rate policy in stabilization programs, the effectiveness of devaluations as a policy tool, and the interaction between exchange rate terms of trade an capital flow. This research will not only prove crucial to our understanding of the role of exchange rates in developing countries, but will clearly set the standard for future work in the field.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 9781557751331
Category : Business & Economics
Languages : en
Pages : 394
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Book Description
This collection of papers, edited by Victor Argy and Paul De Grauwe, examines issues surrounding the choice of exchange rate regime in smaller industrial countries. It contains a comprehensive summary by Jacques J. Polak.
Author: Pierre-Richard Agénor
Publisher: International Monetary Fund
ISBN: 1451850921
Category : Business & Economics
Languages : en
Pages : 43
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Book Description
The paper examines the role of credibility in the conduct of exchange rate policy in developing countries, The analysis is based on a model in which policymakers are concerned about inflation and external competitiveness. Price setters in the nontraded goods sector of the economy adjust prices in reaction to anticipated fluctuations in the domestic price of tradable goods. This type of model is showm to generate a “devaluation bias” which undermines the credibility of a fixed exchange rate. The effect of reputational factors, signaling considerations, and joining a currency union as possible solutions to this bias is examined.
Author: Silke Fabian
Publisher: Physica
ISBN: 9783790807295
Category : Business & Economics
Languages : en
Pages : 172
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Book Description
With the breakdown of the Bretton Woods System and the begin of floating between the major currencies, central banks have been formally freed from their obligations to defend the fixed parities of bilateral exchange rates. Nev ertheless, since then there have been countless occasions on which monetary authorities have officially intervened in the foreign exchange market. More over, numerous studies indicate that exchange rates have been much more variable than originally anticipated - in real and in nominal, as well as in short run and longer run measures (see for example Hesse and Braasch [1989] and Marston [1988]). Through the experience of high real sector costs, the topic of optimal exchange rate management soon reentered policy discussions. The term exchange rate management encompasses both the choice of ex change rate regime as well as active intervention policies within the given 1 system. Much of the recent policy discussion has focussed on the first issue, in particular proposals of how to reform the present international monetary order. And new systems such as the European Monetary System (EMS) have emerged for subgroups of countries. However, the question of finding the optimal system has not yet been resolved.
Author: Peter Isard
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 74
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Book Description
Author: Pierre-Richard Agénor
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
The introduction of a new currency has often occurred as part of a program to fight hyperinflation. In this context, non-uniform conversion rates for different types of assets and liabilities have been used as a means of reducing an initial “excess” stock of liquidity. The paper examines the anticipatory dynamics associated with such reforms. The analysis suggests that monetary reforms of this type have a deflationary effect upon announcement as well as during the transition period. Under uncertainty about the reform date, the direction of the initial jump in prices upon announcement is a priori ambiguous. Upon implementation, a monetary reform leads to a downward jump in prices.
