The Theory of Flexible Exchange Rate Regimes and Macroeconomic Policy
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The authors develops three perspectives on the determination of exchange rates and their interaction with macroeconomic equilibrium and aggregate policies, and concludes with an analysis of dual exchange rate systems as a stabilizing policy in the presence of speculative disturbances.Abstract:
This paper develops three perspectives on the determination of exchange rates and their interaction with macroeconomic equilibrium and aggregate policies. A long- run view characterizes exchange rate determination in terms of monetary and real factors where the real aspects include an explicit consideration of relative price structures. A short-run or “liquidity” view of the exchange rate emphasizes the role of asset market equilibrium and expectations. A policy view, finally, analyses the effectiveness of aggregate policies and points out that in the short-run nominal disturbances will tend to be transmitted internationally. The paper concludes with an analysis of dual exchange rate systems as a stabilizing policy in the presence of speculative disturbances.read more
Citations
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Book ChapterDOI
A Monetary Approach To The Exchange Rate: Doctrinal Aspects And Empirical Evidence
TL;DR: In this paper, the role of expectations in exchange rate determination and a direct observable measure of expectations is proposed, based on the information that is contained in data from the forward market for foreign exchange.
Posted Content
Using Survey Data to Test Some Standard Propositions Regarding Exchange Rate Expectations
TL;DR: This article used survey data and the technique of bootstrapping to test a number of propositions of interest, such as the expected future spot rate can be viewed as inelastic with respect to the contemporaneous spot rate, in that it also puts weight on other variables: the lagged expected spot rate (as in adaptive expectations), the distributed lag expectations, or a long-run equilibrium rate (regressive expectations).
ReportDOI
Using Survey Data to Test Standard Propositions Regarding Exchange Rate Expectations
TL;DR: In this article, the authors compare exchange rate expectations to the process governing the spot rate, and find statistically significant bias in the forward exchange rate and the expected change in the exchange rate.
Book ChapterDOI
Flexible Exchange Rates, Prices and the Role of ‘News’: Lessons from the 1970s
TL;DR: The 1970s witnessed the dramatic alteration of the international monetary system from a regime of pegged exchange rates which prevailed for about a quarter of a century (since the Bretton Woods conference) into flexible (though managed) rates as discussed by the authors.
Book ChapterDOI
The Exchange Rate, The Balance Of Payments and Monetary and Fiscal Policy Under A Regime of Controlled Floating
TL;DR: In this paper, the authors consider the extension of the fundamental principles of the monetary approach to balance of payments analysis to a regime of floating exchange rates, with active intervention by the authorities to control rate movements.
References
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Journal ArticleDOI
Domestic Financial Policies Under Fixed and Under Floating Exchange Rates
TL;DR: In this paper, it is shown that the expansionary effect of a given increase in money supply will always be greater if the country has a floating exchange rate than if it has a fixed rate.
Journal ArticleDOI
Política financiera interna bajo sistemas de tipos de cambio fijos o de tipos de cambio fluctuantes
TL;DR: In particular, the authors demuestra que the efecto expansionista de un aumento dado del medio circulante sera siempre mayor que cuando emplea un tipo de cambio fijo.
Book
The Theory of Protection
TL;DR: In this paper, a splendid and as yet unrivalled treatment of effective tariffs is presented, which will surely become mandatory reading for all those concerned with international trade theory, including economists.
Journal ArticleDOI
A portfolio balance model of the open economy
TL;DR: In this article, the authors developed a framework in which to investigate the effects of macroeconomic policies, where the asset accumulation implied by short-run equilibrium is pursued over time, and the key building blocks are those of Metzler (1968, 1973) in the form of a wealth saving relation and the emphasis on portfolio considerations; the model in its dynamic aspects is extended in a manner suggested in the work of Foley/Sidrauski (1971) and Mussa (1973).