Approaches to exchange rate policy

choices for developing and transition economies

Publisher: International Monetary Fund in Washington, D.C

Written in English
Cover of: Approaches to exchange rate policy |
Published: Pages: 298 Downloads: 27
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Places:

  • Developing countries,
  • Europe, Central,
  • Europe, Eastern

Subjects:

  • Foreign exchange -- Government policy -- Developing countries -- Congresses.,
  • Foreign exchange -- Government policy -- Europe, Central -- Congresses.,
  • Foreign exchange -- Government policy -- Europe, Eastern -- Congresses.,
  • Foreign exchange rates -- Developing countries -- Congresses.,
  • Foreign exchange rates -- Europe, Central -- Congresses.,
  • Foreign exchange rates -- Europe, Eastern -- Congresses.

Edition Notes

StatementIMF Institute ; editors, Richard C. Barth, Chorng-Huey Wong.
ContributionsBarth, Richard C. 1938-, Wong, Chorng-Huey., IMF Institute.
Classifications
LC ClassificationsHG3877 .A67 1994
The Physical Object
Paginationxi, 298 p. :
Number of Pages298
ID Numbers
Open LibraryOL1080447M
ISBN 101557753644
LC Control Number94003937

Flexible Exchange Rates and Stabilization Policy. Authors: Herin, J. Free Preview. Buy this book eB99 € price for Spain (gross) Buy eBook ISBN A Monetary Approach To The Exchange Rate: Doctrinal Aspects And Empirical Evidence. Pages interest rates into the exchange rate’s response. This would conta-minate the measured response of the exchange rate. Further, these four countries have highly liquid financial markets, freely floating exchange rates, and similar monetary policy regimes. We use an event-study methodology as has become common in the literature on asset prices. Surprisingly, 86% of the surveyed companies using this approach do not have regular or sufficient protection against exchange rate fluctuations, leaving assignees vulnerable to changes in purchasing power. Here are three recommendations that may help reduce the impact of exchange rate fluctuations for both the business and the assignee: 1. Looking at the approach of competing theories to a variable such as the exchange rate, you can see how and why each theory provides a certain prediction.

Approaches to Greater Flexibility of Exchange Rates. In this Book the papers presented and comments made at two conferences on the controversial subject of greater flexibility of exchange rates. The first of the conferences was held at Oyster Bay, New York, early in , the second at Bürgenstock, Switzerland, in the summer of The Microstructure Approach to Exchange Rates Richard K. Lyons U.C. Berkeley () MIT Press, published Dec. Figure and Table Caption List Figure The Two Stages of Information Processing. Figure Four Months of Exchange Rates (solid) and Order Flow (dashed). approach to exchange rates. Second, it documents Robertson’s views on that approach. This is a fairly easy task, since the bulk of Robertson’s work on float- ing exchange rates is contained in one volume, namely the edition of his famous Cambridge Economic Handbook Money.2 In that book he. This volume contains the papers presented and comments made at two conferences on the controversial subject of greater flexibility of exchange rates. The first of the conferences was held at Oyster Bay, New York, early in , the second at Bürgenstock, Switzerland, in the summer of One half of the 40 conferees were academic economists, the others were practitioners of the foreign.

Macro Approaches to Foreign Exchange Determination By Menzie D. Chinn* University of Wisconsin and NBER Novem Abstract Macroeconomic approaches to exchange rate determination are reviewed, with an emphasis on empirical models. Monetary and portfolio balance models of nominal exchange rates are described and evaluated.   An asset-based approach is a type of business valuation that focuses on a company's net asset value. The net asset value is identified by subtracting total liabilities from total assets. interest rate policy—might be undertaken with an exchange rate stance in mind. But there is no explicit public promise to sustain any particular exchange rate. In addition to the exchange rate regime, monetary authorities make policies that influence the of the exchange rate—the curlevel - rency’s value.   The purpose of this paper is to evaluate and analyze impacts of the monetary policy (MP) – money aggregate and interest rate – on the exchange rate in Vietnam.,The study uses data over the period of – and applies the vector autoregression model, namely recursive restriction and sign restriction approaches.,The main empirical findings are as follows: a contraction of the money.

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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/5(4). 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. This book focuses on the economics of financial information and how microstructure tools help to clarify the types of information most relevant to exchange rates.

The microstructure approach views exchange rates from the perspective of the trading room, the place where exchange rates are actually by:   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 Approaches to exchange rate policy book a collection of original ideas on foreign exchange (FX) rates in four succinct sections.

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. 5 Exchange Rate Policy 1. Jefiey A. Frankel 2. Fred Bergsten 3. Michael Mussa 1. Je~ey A. Frankel The Making of Exchange Rate Policy in the s Although the s were the decade when foreign exchange rates broke free of the confines of the Bretton Woods system, under which governments since.

ships between exchange rates and other important economic variables. In surveying theoretical models of exchange rate determination, therefore, it is appropriate to examine the empirical regularities that have been characteris- tic of the behavior of exchange rates and other related variables under float- ing exchange rate regimes.

Exchange rate policies come in a range of different forms listed in: let the foreign exchange market determine the exchange rate; let the market set the value of the exchange rate most of the time, but have the central bank sometimes intervene to prevent fluctuations that seem too large; have the central bank guarantee a specific exchange rate; or share a currency with other countries.

Let’s. In this study, panel vector autoregression (PVAR) models are employed to examine the relationships between industrial production growth rate, consumer price inflation, short-term interest rates, stock returns and exchange rate volatility.

More specifically, I explored the consequences of the dynamics detected by the models on monetary policy implementation for 10 OECD countries.

A final approach to exchange rate policy is for a Approaches to exchange rate policy book to choose a common currency shared with one or more nations is also called a merged currency. A merged currency approach eliminates foreign exchange risk altogether.

Just as no one worries about exchange rate movements when buying and selling between New York and California, Europeans.

This book focuses on the economics of financial information and how microstructure tools help to clarify the types of information most relevant to exchange rates. The microstructure approach views exchange rates from the perspective of the trading room, the place where exchange rates are actually determined.

Floating Exchange Rates. A policy which allows the foreign exchange market to set exchange rates is referred to as a floating exchange U.S.

dollar is a floating exchange rate, as are the currencies of about 40% of the countries in the world economy. Osle r () shows that when an exchange rate approaches a round number, such as yen to t he dollar, it tends to reverse its path. But when an exchange rate does cross.

EXCHANGE RATES: CONCEPTS, MEASUREMENTS AND ASSESSMENT OF COMPETITIVENESS Bangkok Novem Rajan Govil, Consultant. This activity is supported by a grant from Japan. Recent interaction, however, has given rise to a microstructure approach to exchange rates.

This book focuses on the economics of financial information and how microstructure tools help to clarify the types of information most relevant to exchange rates.

Comment on P. Kouri, “The Exchange Rate and the Balance of Payments in The Short Run and in The Long Run: A Monetary Approach” Alexander K. Swoboda Pages The contrast between fixed or jumping exchange rates and gliding exchange rates is clearly described and the various systems of increased flexibility, such as the “wider band” and the “crawling peg,” are explained and examined.

Originally published in   Recent interaction, however, has given rise to a microstructure approach to exchange rates. This book focuses on the economics of financial information and how microstructure tools help to clarify the types of information most relevant to exchange rat/5(1).

This book provides a new, comprehensive, and in-depth examination of the standard theories and latest research in exchange-rate economics. Covering a vast swath of theoretical and empirical work, the book explores established theories of exchange-rate determination using macroeconomic fundamentals, and presents unique microbased approaches that.

Recent interaction, however, has given rise to a microstructure approach to exchange rates. This book focuses on the economics of financial information and how microstructure tools help to clarify the types of information most relevant to exchange rates.

The microstructure approach views exchange rates from the perspective of the trading room, the place where exchange rates are actually determined. This book describes and evaluates the literature on exchange rate economics. It provides a wide-ranging survey, with background on the history of international monetary regimes and the institutional characteristics of foreign exchange markets, an overview of the development of conceptual and empirical models of exchange rate behavior, and perspectives on the key issues that policymakers.

Its high-level perspective on the global economy differentiates this introduction to international finance from other textbooks. Melvin and Norrbin provide essential information for those who seek employment in multinational industries, while competitors focus on standard economic tools.

The international political economy of exchange rate policy International monetary regimes tend toward one of two ideal types. The first is a fixed-rate system, in which currencies are tied to each other at publicly announced rates. Some fixed-rate systems involve a common link to a.

A final approach to exchange rate policy is for a nation to choose a common currency shared with one or more nations is also called a merged currency. A merged currency approach eliminates foreign.

This text strives to reach a median between these two approaches. First, I believe that students need to learn the theory and models to understand how economists understand the world. I also think these ideas are accessible to most students if they are explained thoroughly.

This text presents numerous models in some detail, not by employing advanced mathematics, but rather by walking students. the forecaster, there are two pure approaches to forecasting foreign exchange rates: (1) The fundamental approach.

(2) The technical approach. 1.A Fundamental Approach The fundamental approach is based on a wide range of data regarded as fundamental economic variables that determine exchange rates.

These fundamental economic variables are taken. Therefore, the exchange rate between dollar and pound at the maximum can be £ 1 = $ This exchange rate signifies U.S. gold export point or upper specie point. Similarly, the exchange rate of pound could not fall below $ dollars, in case the United States had a BOP surplus resulting in flow of gold from Britain to that country.

Historical Approaches to Monetary Policy. Over the past century, the United States has experienced periods in which the overall level of prices of goods and services was rising--a phenomenon known as inflation--and rare periods in which the overall level of prices was falling--a phenomenon known as deflation.

Consumer prices fell sharply after World War I and during the first several years of. This estimate of the effects of QE on the exchange rate remains fairly comparable with those for the effects of conventional monetary policy – it is broadly similar to the exchange rate effect of an unanticipated two-basis-point decline in one-year interest rates in the euro area relative to those in the US (Ca’ Zorzi et al.

This book analyzes key international monetary issues from a macro-foundations perspective, focusing on economy-wide variables that form the basis of real-world macroeconomic policy analysis.

It proposes novel frame As Economies become more integrated with the rest of the world, the need to better understand their international monetary linkages. There are two approaches: (a) home currency approach and (b) foreign currency approach.

Home Currency Approach In the home currency approach, the net present value of a foreign project is determined by (a) converting the foreign-currency cash flows of the project to the domestic currency based on the expected forward exchange rates, and (b) discounting the cash flows based .In a reserve currency system, the reserve currency has a gold parity, and all other currencies are pegged to the reserve currency, which also leads to fixed exchange rates.

Fixed exchange rates enable the following: The reduction of uncertainty in international trade and portfolio flows: Exchange rate risk is a barrier to international business.flow approach does not model the exchange rate in a way consistent with financia l-market efficiency.

I return to the parallels between the flow and micr o structure approaches in chapter 7. 8.