Exchange Rate Determination and Optimal Economic Policy Under Various Exchange Rate Regimes

Exchange Rate Determination and Optimal Economic Policy Under Various Exchange Rate Regimes

4.11 - 1251 ratings - Source



1.1 Some characteristics of the floating exchange rate system The flexible exchange rate system has functioned far less satisfactorily than many anticipated in 1973, when the major industrialized countries decided to let their currencies float. The dominant currencies' exchange rates have fluctuated more 1 than expected. These fluctuations concern both short-term movement- intraday fluctuations and movements during a week or a month - and long term changes that last for more than a year. Daily percentage changes of one percent are not unusual for the recent float (see MacDonald, 1988, p.8). However, the release of new information can give rise to much larger changes. For example in August 1987 qthe dollar moved down 6 percent in two days based on the July trade figuresq (Glynn, 1988, p. 36). For the period 1973-1985 MacDonald (1988, p.10) presents minimum and maximum monthly percentage exchange rate changes. These figures clearly illustrate the magnitude of the volatility and also show that the volatility has not diminished as the experience 2 with floating has increased. In addition to this volatility, exchange rates are also characterized by misalignment: qpersistent departure of the exchange rate from its long-run equilibriumq (Williamson, 1983, p.l3). Although the measure of misalignment depends upon the exact definition of the exchange rate's long-run equilibrium, there is a widespread feeling that during the greater part of the 1970s the dollar was undervalued, whereas it was overvalued during the first half of the 1980s.... Journal 93 (4), 820a€“831. Haan, H. de, S. Korteweg, S.K. Kuipers and J.K.T. Postma, 1979, Het Moderne ... Hall, B.H. and R.E. Hall, 1980, Time Series Processor, version 3.5, usera#39;s manual, London, Ontario. Hansen, L.P. and Sargent T.J., anbsp;...


Title:Exchange Rate Determination and Optimal Economic Policy Under Various Exchange Rate Regimes
Author: Eelke de Jong
Publisher:Springer - 2013-12-19
ISBN-13:

You must register with us as either a Registered User before you can Download this Book. You'll be greeted by a simple sign-up page.

Once you have finished the sign-up process, you will be redirected to your download Book page.

How it works:
  • 1. Register a free 1 month Trial Account.
  • 2. Download as many books as you like (Personal use)
  • 3. Cancel the membership at any time if not satisfied.


Click button below to register and download Ebook
Privacy Policy | Contact | DMCA