The collapse of exchange rate regimes causes, consequences, and policy responses

Cover of: The collapse of exchange rate regimes |

Published by Kluwer Academic in Boston .

Written in English

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Subjects:

  • Foreign exchange,
  • Foreign exchange rates,
  • Money,
  • Currency question

Edition Notes

Book details

Statementedited by George S. Tavlas.
ContributionsTavlas, George S.
Classifications
LC ClassificationsHG3851 .C649 1997
The Physical Object
Pagination243 p. :
Number of Pages243
ID Numbers
Open LibraryOL1012786M
ISBN 100792398696
LC Control Number96053443

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The Collapse of Exchange Rate Regimes Softcover reprint of the original 1st ed. Edition by George S. Tavlas (Editor) › Visit Amazon's George S. Tavlas Page. Find all the books, read about the author, and more. See search results for this author. Are you an author. Format: Paperback. The result is either a devaluation of the exchange rate or a switch to floating.

Subsequent work of this genre has specified a number of other channels, in addition to that involving inconsistent and unsustainable monetary and fiscal policies, that can precipitate an attack: 1. Inconsistency between external and internal objectives. Suppose that S is the fixed exchange rate and define g(r) as the shadow floating rate, the flexible exchange rate which would prevail if agents were to purchase all the government’s reserves at t.

Alternatively, 3(t) is the flexible rate conditional on a collapse of the fixed-rate regime at The collapse of exchange rate regimes book. The Collapse of Exchange Rate Regimes: Causes, Consequences and Policy Responses (Open Economies Review, No ): Economics Books @ The Collapse of Exchange Rate Regimes Causes, Consequences and Policy Responses.

Editors: Tavlas, George S. (Ed.) Free Preview. The Collapse of Exchange Rate Regimes: Causes, Consequences and Policy Responses Pdf, Download Ebookee Alternative Reliable Tips For A Improve Ebook Reading Experience. Get this from a library. Collapsing Exchange Rate Regimes: Shocks and Biases.

[Linda S Goldberg; National Bureau of Economic Research.;] -- Patterns in domestic credit creation stemming from inconsistent fiscal policies have received widespread attention for aggravating speculative attacks on central bank foreign exchange reserves and.

A nation essentially has three options for exchange rate regimes. It can adopt a floating, fixed, or crawling peg exchange rate regime. A flexible exchange rate regime lets the forces of supply and demand determine currency values.

A fixed exchange rate regime pegs the value of the domestic currency to another currency. Get this from a library. The collapse of exchange rate regimes: causes, consequences, and policy responses. [George S Tavlas;]. Corrections. All material on this site has been provided by the respective publishers and authors.

You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:inecon:vyipSee general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title. Collapsing exchange-rate regimes: Some linear examples (84) Get rights and content. Abstract. We construct a pair of linear examples to study the collapse time of a fixed exchange-rate regime.

The first example is a perfect-foresight, continuous-time model which allows calculation of the exact collapse time and the tracking of Cited by: With the outbreak of the two World Wars in andstable exchange rate regimes had gone completely haywire.

The Bretton Woods system was established. When and why did the fixed exchange rate system collapse. primarily due to speculative pressure on the dollar following a rise in U.S.

inflation and a growing U.S. balance of trade deficit. Sincethe world has operated with a floating exchange rate regime, and exchange rates have become more volatile and far less predictable. called bipolar view of exchange rate regimes.4,5 The viability of soft peg regimes in particular 2 These include the ERM crisis of –93, the Mexican crisis of –95, the Asian crises in –98 involving Indonesia, Korea, Malaysia, the Philippines, and Thailand, and the crises inCited by: In this book, two leading economists examine the operation and consequences of exchange rate regimes in an era of increasing international l Klein and Jay Shambaugh focus on the evolution of exchange rate regimes in the modern era, the period sincewhich followed the Bretton Woods era of –72 and the pre-World.

COLLAPSING EXCHANGE RATE REGIMES: A REINTERPRETATION ABSTRACT Microfoundations are provided for a common model of balance of payments crises by showing formal equivalence to a standard overlapping generations model.

Certain domestic policy rules are inconsistent with fixed exchange rate equilibrium, which is in agreement with previous results. An empirical study of exchange rate regimes based on data compiled from 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 s, countries have adopted a wide variety of regimes, ranging from pure.

An exchange rate regime is the way a monetary authority of a country or currency union manages the currency in relation to other currencies and the foreign exchange is closely related to monetary policy and the two are generally dependent on many of the same factors, such as economic scale and openness, inflation rate, elasticity of the labor market, financial market development.

Downloadable (with restrictions). The loss of output in major recessions tends to be permanent. Using IMF de facto exchange rate regime classifications over the period – for up to countries, it is shown that growth collapses are more frequent under less flexible exchange rate regimes, and particularly hard pegs.

Amongst intermediate regimes, those with recent devaluations are Cited by: 1. Journal of Development Economics 27 () North-Holland COLLAPSING EXCHANGE RATE REGIMES Rudiger DORNBUSCH* Massachusetts Institute of Technology, Cambridge, MAUSA The paper develops models of speculative runs and collapse of fixed exchange rate regimes which result from credit policies that are ultimately inconsistent with a fixed exchange by: The Operation and Collapse of Fixed Exchange Rate Regimes Peter M.

Garber, Lars E.O. Svensson. NBER Working Paper No. Issued in December NBER Program(s):International Finance and Macroeconomics The paper reviews the recent literature on exchange rate target zones and on speculative attacks on fixed exchange rates. Real Effects of Collapsing Exchange Rate Regimes: An Application to Mexico Article in Journal of International Economics 57(2) August with 18 Reads How we measure 'reads'.

The Collapse Of Exchange Rate Regimes PDF Book - Ian Fleming Library Ical And To Self Fulfilling Currency Crisis Respectively Research Stressing The Former Approach Was Pioneered By Krugman And Flood.

The Mexican peso crisis was a currency crisis sparked by the Mexican government's sudden devaluation of the peso against the U.S. dollar in Decemberwhich became one of the first international financial crises ignited by capital flight.: 50–52 During the presidential election, the incumbent administration embarked on expansionary fiscal and monetary policy.

A history of currency regimes (or exchange-rate regimes) is, by necessity, one of international trade and investment and the efforts to make them successful. R.P. Flood and P.M. Garher, Collapsing exchange-rate regimes 3 supply equals the book value of international reserves plus domestic credit.

(3) states that domestic credit always grows at the positive, constant rate /.L Eqs. (4) and (5) impose purchasing power parity. Check out these tips to step up your exchange rate know-how: Exchange rate as a relative price.

The dollar-euro exchange rate indicates the amount of dollars necessary to purchase one euro. If the exchange rate is $, it means that you need $ per euro. Real vs. nominal exchange rates.

Collapsing Exchange Rate Regimes: Another Linear Example Robert P. Flood, Peter M. Garber, Charles Kramer. NBER Working Paper No. Issued in October NBER Program(s):International Finance and Macroeconomics In the literature on speculative attacks on a fixed exchange rate, it is usually assumed that the monetary authority responsible for fixing the exchange rate reacts passively to the.

exchange rate regimes. Answer: The balance of payments identity holds that the combined balance on the current and capital accounts should be equal in size, but opposite in sign, to the change in the official reserves: BCA + BKA = -BRA. Under the pure flexible exchange rate regime, central banks do not engage in official reserve Size: 25KB.

Shambaugh’s () book Exchange Rate Regimes in the Modern Era, and then proceed to provide an alternative overview of what the economics professions knows and needs to know about exchange rate regimes.

While a fixed exchange rate with capital mobility is a well‐. Vulnerability of fixed exchange rate regimes: the role of economic fundamentuls THE CAUSES OF EXCHANGE RATE CRISES Fundamental factors There is a fairly well-established theoretical literature concerning the role of macroeconomic fundamentals for currency crises in fixed exchange rate regimes.

Initial contributions stressed the role of deteriorating economic fundamentals priorFile Size: KB. The optimal exchange rate and monetary regimes have been an issue of discussion since the beginning of the 70 th with the breakdown of retton Woods [s system. There is a large body of theoretical andCited by: 1.

The Collapse of Exchange Rate Pegs By HARRIS DELLAS, P.A.V.B. SWAMY, and GEORGE S. TAVLAS ABSTRACT: All pegged exchange rate arrangements are subject to predicaments that cast doubt on the ability of the policy makers to maintain the peg.

This article organizes the literature dealing with the fragility of exchange rate nominal-anchor regimes. Figure 1. A Spectrum of Exchange Rate Policies. A nation may adopt one of a variety of exchange rate regimes, from floating rates in which the foreign exchange market determines the rates to pegged rates where governments intervene to manage the value of the exchange rate, to a common currency where the nation adopts the currency of another country or group of countries.

In these countries, their floating foreign exchange rate regimes are doing the work of helping their economies deal with the external and fiscal adjustment that such collapse in oil prices entails. But in those countries like Venezuela that are unable or unwilling to adjust, the oil price collapse is significantly deteriorating their dollar.

Figure A Spectrum of Exchange Rate Policies A nation may adopt one of a variety of exchange rate regimes, from floating rates in which the foreign exchange market determines the rates to pegged rates where governments intervene to manage the exchange rate's value, to a common currency where the nation adopts another country or group of.

The last and newest exchange rate is the SIMADI, currently at bolivars per dollar. This rate is reserved for the purchase and sale of foreign currency to individuals and businesses. There are many problems in Venezuela as a result of this complex system. The exchange rate regime that followed the collapse of the fixed exchange rate from BUSI at Carleton University.

Many feared that the collapse of the Bretton Woods system would bring the period of rapid growth to an end. In fact, the transition to floating exchange rates was relatively smooth, and it was certainly timely: flexible exchange rates made it easier for economies to adjust to more expensive oil, when the price suddenly started going up in.

This book – written by leading academics and practitioners in the field – brings together cutting edge research on exchange rate regime and monetary union issues. There is a particular focus on the implications for member states of the Gulf Cooperation Council which is itself working towards forming a monetary union for the Gulf : Zubair Iqbal.

However, empirical findings on the relationship between exchange rate regimes and currency mismatches in the balance sheet of corporate sectors are mixed and still subject to debate. Some studies find that the large devaluation that followed the collapse of the. Modern Exchange Rate Regimes.

Currently, most governments use one of three different exchange rate systems: Managed Floating Exchange Rate – This is the system that most developed nations use. In this system, the currency is allowed to float against all other currencies thereby letting market forces determine the value of the currency.

Exchange rates tell you how much your currency is worth in a foreign currency. Think of it as the price being charged to purchase that currency. Foreign exchange traders decide the exchange rate for most currencies.

They trade the currencies 24 hours a day, seven days a week. As ofthis market trades $ trillion a day.

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