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| Volz, Ulrich. |
| This paper argues that, in contrast to the popular bipolar view on exchange rate choices, intermediate regimes in general and regional exchange rate systems such as the European Monetary System (EMS) in particular should not be ruled out per se even in today's world of highly mobile capital. The paper highlights that the 1992/93 crisis of the EMS' Exchange Rate Mechanism was a crisis of an exchange rate system and not just the collapse of unilateral pegs pursued by individual countries. Based on an assessment of credibility of the EMS before and during the crisis, the paper discusses distinct features that add to the credibility of regional exchange rate systems. It reasons that a system that is built around well-defined rules, and which is managed very... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Exchange rate regimes; Regional monetary systems; EMS crisis; Policy credibility; Financial Economics; F02; F33; F36; F42. |
| Ano: 2005 |
URL: http://purl.umn.edu/26238 |
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| Ritter, Raymond. |
| A two sector small open economy model developed by Corden (1991, 2002) is used to analyse the impact of sudden stops in capital inflows on an internal and external equilibrium and to explore the merits of disposing of the nominal exchange rate as policy tool in rectifying real exchange rate misalignments. It is shown how the economy's sectoral demand properties determine the extent of recession associated with real exchange rate adjustment that is neither engineered by nominal exchange rate changes nor brought about by a decline in nontraded goods prices. The conclusion is drawn that, when deciding on the design of exchange rate regimes, the structural characteristics of the economy ought to be considered so as to appropriately strengthen its capacity to... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Capital inflows; Sudden stops; Real exchange rate adjustment; Exchange rate regimes; Financial Economics; F31; F32; F41. |
| Ano: 2003 |
URL: http://purl.umn.edu/26317 |
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