Essays on Exchange Rates and Central Bank Credibility PDF Download

Author: Per-Ola Maneschiöld
Publisher:
ISBN:
Category : Banks and banking, Central
Languages : en
Pages : 162

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Author: Muhammad Naveed Tahir
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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The aim of this thesis is to analyze the impact of globalization on the dynamics of inflation and monetary policy in a globalized world. It consists of three essays.In the first essay we investigate the impact of financial globalization on the behaviour of inflation targeting emerging market economies with respect to exchange rate - Do central banks respond to exchange rate movements or not? We use quarterly data for six emerging market inflation targeting economies from the date of their inflation targeting adoption to 2009 Q4. The chapter uses small open economy new Keynesian model à la Gali and Monacelli (2005), and employs multi-equation GMM technique to investigate the relationship. We find that the response of central bank to the exchange rate in case of Brazil, Chile, Mexico and Thailand is statistically significant while insignificant for Korea and Czech Republic. Theoretically, it should not be so as even under flexible inflation targeting central bank responds to inflation deviation and output gap; we think that the peculiar characteristics of emerging markets, like fear of floating, weak financial system and low level of central bank credibility make exchange rate important for these economies. In the second essay we investigate empirically the relative importance of monetary transmission channels for Brazil, Chile and Korea. This chapter uses monthly data from the inception of inflation targeting regime to 2009 M12. We use a SVAR model incorporating the main monetary transmission channels combined together instead of individual channels in isolation. The empirical results indicate that the exchange rate channel and the share price channel have higher relative importance than the traditional interest rate and credit channel for industrial production. The results are not much different in case of inflation, except for Korea. The high ranking of exchange rate and share price channel is in line with the results by Gudmundsson (2007), which finds that exchange rate channel might have overburdened in the wake of financial globalization.In the third chapter we investigate empirically the role of openness - real and financial - on the inflation dynamics of Brazil, Chile and Korea. The chapter uses monthly data from the inception of inflation targeting regime to the end month of 2009. In this chapter we employ the Generalized Method of Moments (GMM) technique. We use imports to GDP ratio as an indicator for real openness whereas Chinn and Ito index (KAOPEN) and total assets plus total liabilities to GDP ratio form the data set of Lane and Milesi-Ferretti are two proxies for financial openness. The chapter concludes that there exists, generally, a positive relationship between real openness and inflation. However, in case of financial globalization the results are inconclusive as they are sensitive to measurement method of financial globalization.

Author: William Allen
Publisher: Routledge
ISBN: 1134530145
Category : Business & Economics
Languages : en
Pages : 305

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Maxwell Fry was known internationally for his research into international and domestic financial issues. This book constitutes a tribute to his pioneering work in so many areas, and draws together contributions from a range of academic and policy-making colleagues who were fortunate enough to experience the depth of knowledge and insights which Max

Author: Mr.Yan Carriere-Swallow
Publisher: International Monetary Fund
ISBN: 1475569211
Category : Business & Economics
Languages : en
Pages : 33

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A long-standing conjecture in macroeconomics is that recent declines in exchange rate pass-through are in part due to improved monetary policy performance. In a large sample of emerging and advanced economies, we find evidence of a strong link between exchange rate pass-through to consumer prices and the monetary policy regime’s performance in delivering price stability. Using input-output tables, we decompose exchange rate pass-through to consumer prices into a component that reflects the adjustment of imported goods at the border, and another that captures the response of all other prices. We find that price stability and central bank credibility have reduced the second component.

Author: Age F.P. Bakker
Publisher: Springer Science & Business Media
ISBN: 9401723583
Category : Political Science
Languages : en
Pages : 390

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Monetary Stability through International Cooperation contains essays written by high ranking policy makers in the field of central banking and international finance, written in honour of André Szász, who has been Executive Director of De Nederlandsche Bank since 1973, responsible for international monetary relations. Colleagues from several other central banks, from finance ministries and from international institutions pay tribute to him by analysing the conditions fostering European as well as global monetary stability. The book provides an inside view of the thinking of monetary officials at the turn of 1993/1994, when the currency turmoil in the ERM of mid-1993 had subsided and views on its implications for exchange rate management and, more generally, for European integration were taking shape. Topics include exchange rate stabilisation, policy coordination and central bank independence. A second section, on the international monetary system, includes essays on the policy implications of present day dynamic financial markets as well as the role of the IMF. This book, written by `insiders for an insider', provides valuable insights to those who are interested in contemporary international monetary relations.

Author: Michael D. Bordo
Publisher: Cambridge University Press
ISBN: 1107149665
Category : Business & Economics
Languages : en
Pages : 719

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Book Description
This book discusses the role of central banks and draws lessons from examining their evolution over the past two centuries.

Author: Paul Mizen
Publisher: Edward Elgar Publishing
ISBN: 9781781950777
Category : Business & Economics
Languages : en
Pages : 312

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Commenting on the quality of the contributors when opening the conference on which these books are based, the former Governor of the Bank of England, Sir Edward George, said "I cannot remember ever before having had such a galaxy of academic economist and central banking superstars gathered together under one roof!"' Celebrating the contribution that Charles Goodhart has made to monetary economics and policy, this unique compendium of original papers draws together a highly respected group of international academics, central bankers and financial market regulators covering a broad range of issues in modern monetary economics. Topics discussed include: central bank independence credibility and transparency the inflation forecast and the loss function monetary policy experiences in the US and the UK the implications of Goodhart's Law the benefits of single versus multiple currencies money, near monies and credit. Each chapter of the volume relates to subjects that have been research projects in Charles Goodhart's wide-ranging portfolio, and all are interconnected. Through these, the book offers a summary of current thinking and insights into monetary controversies. Covering recent thinking on monetary theory, central banking, financial regulation and international finance, academic and professional economists alike will find this book an invaluable source of information. The companion volume examines monetary history, exchange rates and financial markets.

Author: Scott Davis
Publisher:
ISBN:
Category :
Languages : en
Pages : 38

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Central banks that lack credibility often tie their exchange rate to that of a more credible partner in order to “import” credibility. We show in a small open economy model that a central bank that displays “limited credibility” can deliver significant improvements to a social welfare function that contains no role for exchange rate stabilization by maximizing an objective function that places weight on exchange rate stabilization, and thus the central bank with limited credibility will peg their currency to that of a more credible partner. As the central bank's credibility improves it will place less weight on exchange rate stabilization in its objective function and thus loosen the peg. When the central bank is perfectly credible its objective function and the social welfare function are identical; it places no weight on exchange rate stabilization and allows the currency to freely float. Empirical results using a panel of both developed and developing countries show that as central banks become more independent they tend to allow more currency flexibility.

Author: Charles Wyplosz
Publisher: Routledge
ISBN: 1135163812
Category : Business & Economics
Languages : en
Pages : 284

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The New International Monetary System brings together twelve original contributions by leading scholars and practitioners to a conference convened in May 2008 on the occasion of the retirement of Alexander Swoboda. The contributions are arranged in three main parts. Part I deals with the international financial architecture, Part II examines the ever-controversial role of exchange rate regimes and Part III takes stock of the conduct of monetary policy and the challenges posed by the inflation-targeting strategy. The chapters provide considered assessments of virtually all the hotly debated issues that concern monetary policies seen from an international perspective. Edited by and with an introduction from Charles Wyplosz, the collection includes contributions from some of the key international figures in the field of monetary policy, central banking and exchange rate regimes to discuss contemporary international monetary issues. Contributors include Michael Bordo, Barry Eichengreen, Ronald McKinnon and Charles Goodhart. The volume also contains tributes from Paul Volcker and Jean-Pierre Roth.

Author: Sebastian Edwards
Publisher: Cambridge University Press
ISBN: 9780521597111
Category : Business & Economics
Languages : en
Pages : 452

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Book Description
The essays collected in this volume discuss the impact of increased capital mobility on macroeconomic performance.