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Optimal Exchange Rate Policy in a Growing Semi-Open Economy

Bacchetta, Philippe; Benhima, Kenza; Kalantzis, Yannick - C.E.P.R. Discussion Papers - 2013

In this paper, we consider an alternative perspective to China's exchange rate policy. We study a semi-open economy where the private sector has no access to international capital markets but the central bank has full access. Moreover, we assume limited financial development generating a large...

Persistent link: https://www.econbiz.de/10011083998

Exchange Rates and Adjustment: Perspectives from the New Open Economy Macroeconomics

Obstfeld, Maurice - C.E.P.R. Discussion Papers - 2002

The New Open Economy Macroeconomics has allowed economists to tackle classical problems with new tools, while also generating new ideas and questions. In their attempts to make the new models capture empirical regularities, researchers have entertained a variety of assumptions about the...

Persistent link: https://www.econbiz.de/10005656335

Monetary Policy with Flexible Exchange Rates and Forward Interest Rates as Indicators

Svensson, Lars E O - C.E.P.R. Discussion Papers - 1994

In the new situation with flexible exchange rates, monetary policy in Europe will have to rely more on indicators than previously under fixed rates. One of the potential indicators, the forward interest rate curve, can be used to indicate market expectations of the time-paths of future short...

Persistent link: https://www.econbiz.de/10005791726

Exchange Rate Policies for the EFTA Countries in the 1990s

Branson, William H - C.E.P.R. Discussion Papers - 1991

As the European Community (EC) unifies its financial markets and fixes its exchange rates, the EFTA countries are liberalizing capital movements to the same extent. The EFTA countries thus face a decision on financial markets and exchange rate policy: should they essentially join the European...

Persistent link: https://www.econbiz.de/10005504364

Modeling Exchange Rate Passthrough After Large Devaluations

Burstein, Ariel Tomas; Eichenbaum, Martin; Rebelo, Sérgio - C.E.P.R. Discussion Papers - 2005

Large devaluations are generally associated with large declines in real exchange rates. We develop a model which embodies two complementary forces that account for the large declines in the real exchange rate that occur in the aftermath of large devaluations. The first force is sticky...

Persistent link: https://www.econbiz.de/10005504694

Exchange Rates Dynamics with Long-Run Risk and Recursive Preferences

Kollmann, Robert - C.E.P.R. Discussion Papers - 2014

, then long-run risk generates insufficient exchange rate volatility. A longrun risk model with recursive-preferences in … which all agents trade in complete global financial markets can generate realistic exchange rate volatility; however, I show … the remaining households lead hand-to-mouth lives, generates realistic exchange rate and external balance volatility …

Persistent link: https://www.econbiz.de/10011084256

Volatility Risk Premia and Exchange Rate Predictability

Della Corte, Pasquale; Ramadorai, Tarun; Sarno, Lucio - C.E.P.R. Discussion Papers - 2013

We investigate the predictive information content in foreign exchange volatility risk premia for exchange rate returns …. The volatility risk premium is the difference between realized volatility and a model-free measure of expected volatility … that is derived from currency options, and reflects the cost of insurance against volatility ‡fluctuations in the …

Persistent link: https://www.econbiz.de/10011084715

On the Unstable Relationship between Exchange Rates and Macroeconomic Fundamentals

Bacchetta, Philippe; van Wincoop, Eric - C.E.P.R. Discussion Papers - 2009

remarkably little effect on the volatility of exchange rates, the in-sample explanatory power of macro fundamentals and the …

Persistent link: https://www.econbiz.de/10004991548

Chinese Currency Controversies

Eichengreen, Barry - C.E.P.R. Discussion Papers - 2004

This Paper reviews the controversy over China’s exchange rate regime. Placing the issue in the context of the literature on exit strategies, it argues that now is the best time for China to exit from its peg. Moving to a managed float would be in the country’s own interest; it would help the...

Persistent link: https://www.econbiz.de/10005067647

Differences in Exchange Rate Pass-Through in the Euro Area

Campa, José Manuel; Mìnguez, González; Manuel, Jose - C.E.P.R. Discussion Papers - 2004

This Paper focuses on the pass-through of exchange rate changes into the prices of imports made by euro area countries originating outside the area. Using data on import unit values for 13 different product categories for each country, we estimate industry-specific rates of pass-through across...

Persistent link: https://www.econbiz.de/10005067653