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Exchange Rate Regime Transitions

Paul R. Masson

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Description:Some have argued that the only sustainable regimes are free floating and hard exchange rate commitments essentially currency boards or monetary unions (Eichengreen, 1994, 1998; Obstfeld and Rogoff, 1995). For instance, Eichengreen (1994, pp. 4 5) says that contingent policy rules to hit explicit exchange rate targets will no longer be viable in the twenty-first century Countries will be forced to choose between floating exchange rates on the one hand and monetary unification on the other. Similarly, Obstfeld and Rogoff (1995, pp. 74) state there is little, if any, comfortable middle ground between floating rates and the adoption of a common currency. Hence, in the view of these authors, in the future we will see a disappearance of the middle ground that corresponds to soft commitments to some sort of intermediate exchange rate regime adjustable pegs, crawling pegs, or bands, and perhaps also managed floating. This view is sometimes called the two poles or hollowing out (e.g., Eichengreen, 1994, pp. 6) theory of exchange rate regimes, and is based on the observation that higher capital mobility makes exchange rate commitments increasingly fragile. However, like the optimal currency area literature, which is essentially static, an explicit or implicit assumption is made that regimes are chosen to last forever, and from this perspective, one would only choose a regime that could be sustained once and for all. Only the hardest peg and the absence of any exchange rate commitment whatsoever are likely to qualify on that basis. Thus Eichengreen (1994, pp. 5), states This will rule out the maintenance for extended periods of pegged but adjustable exchange rates, crawling pegs, and other regimes in which governments pre-announce limits on exchange rate fluctuations (italics added)."We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Exchange Rate Regime Transitions. To get started finding Exchange Rate Regime Transitions, you are right to find our website which has a comprehensive collection of manuals listed.
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Pages: 38

Format: PDF, EPUB & Kindle Edition

Publisher: International Monetary Fund

Release: 2013

ISBN: 1282106783

Description: Some have argued that the only sustainable regimes are free floating and hard exchange rate commitments essentially currency boards or monetary unions (Eichengreen, 1994, 1998; Obstfeld and Rogoff, 1995). For instance, Eichengreen (1994, pp. 4 5) says that contingent policy rules to hit explicit exchange rate targets will no longer be viable in the twenty-first century Countries will be forced to choose between floating exchange rates on the one hand and monetary unification on the other. Similarly, Obstfeld and Rogoff (1995, pp. 74) state there is little, if any, comfortable middle ground between floating rates and the adoption of a common currency. Hence, in the view of these authors, in the future we will see a disappearance of the middle ground that corresponds to soft commitments to some sort of intermediate exchange rate regime adjustable pegs, crawling pegs, or bands, and perhaps also managed floating. This view is sometimes called the two poles or hollowing out (e.g., Eichengreen, 1994, pp. 6) theory of exchange rate regimes, and is based on the observation that higher capital mobility makes exchange rate commitments increasingly fragile. However, like the optimal currency area literature, which is essentially static, an explicit or implicit assumption is made that regimes are chosen to last forever, and from this perspective, one would only choose a regime that could be sustained once and for all. Only the hardest peg and the absence of any exchange rate commitment whatsoever are likely to qualify on that basis. Thus Eichengreen (1994, pp. 5), states This will rule out the maintenance for extended periods of pegged but adjustable exchange rates, crawling pegs, and other regimes in which governments pre-announce limits on exchange rate fluctuations (italics added)."We have made it easy for you to find a PDF Ebooks without any digging. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Exchange Rate Regime Transitions. To get started finding Exchange Rate Regime Transitions, you are right to find our website which has a comprehensive collection of manuals listed.
Our library is the biggest of these that have literally hundreds of thousands of different products represented.

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Exchange Rate Regime Transitions

Exchange Rate Regime Transitions

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