Intro -- Contents -- Contributors -- Acknowledgments -- Introduction -- I Monetary and Exchange Rate Policy in Theory -- 1 Pricing-to-Market, the Interest-Rate Rule, and the Exchange Rate -- 2 Optimal Exchange RateRegimes: Turning Mundell-Fleming's Dictum on Its Head -- 3 Monetary Policy Rules,...

Many emerging market countries have suffered financial crises. One view blames soft pegs for these crises. Adherents of this view suggest that countries move to corner solutions—hard pegs or floating exchange rates. We analyze the behavior of exchange rates, reserves, and interest rates to...

In recent years, many countries have suffered severe financial crises, producing a staggering toll on their economies, particularly in emerging markets. One view blames fixed exchange rates-- soft pegs'--for these meltdowns. Adherents to that view advise countries to allow their currency to...

The shift to inflation targeting has contributed to the relatively low inflation observed in some emerging market economies although, as noted by many economists, the preconditions required for a successful implementation were not in place. The existence of managed exchange rate regimes, a...

Africa lags behind other regions in attracting foreign direct investment (FDI). In some circumstances, there are obvious explanations for the absence of FDI, such as a high incidence of war. In this paper, we examine the role that monetary and exchange rate policy may have played in explaining...

The two papers draw from the brief yet radical reform experiences of five countries-Bulgaria, former Czechoslovakia, Hungary, Poland, and Romania. The first paper describes the financial sector reforms untertaken by these countries since the 1980s, as well as the problems encountered. It also...

This paper analyzes stabilization policy under predetermined exchange rates in a cash-in-advance, staggered-prices model. Under full credibility, a reduction in the rate of devaluation results in an immediate and permanent reduction in the inflation rate, with no effect on output or consumption....