Fiscal Policy and the Predictability of Exchange Rate Collapse

It is well known that the long-run viability of a fixed exchange rate regime imposes constraints on monetary policy. This paper shows that, in a model with forward-looking agents, short-run viability imposes a fiscal constraint. When policy change, which destroys long-run viability, also violates the fiscal constraint, collapse is instantaneous. Delayed predictable collapse requires satisfaction of the fiscal constraint

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Year of publication:	[2006]
Authors:	Daniel, Betty Carolyn
Publisher:	[2006]: [S.l.] : SSRN
Subject:	Wechselkurs \| Exchange rate \| Finanzpolitik \| Fiscal policy \| Theorie \| Theory \| Währungskrise \| Currency crisis \| Geldpolitik \| Monetary policy \| Prognoseverfahren \| Forecasting model

Extent:	1 Online-Ressource (18 p)
Series:	IMF Working Paper, Vol. , pp. 1-18, 1997
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 1997 erstellt
Other identifiers:	10.2139/ssrn.882689 [DOI]
Classification:	F31 - Foreign Exchange ; F33 - International Monetary Arrangements and Institutions ; F41 - Open Economy Macroeconomics ; F42 - International Policy Coordination and Transmission
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012782157