Dominant Currency Paradigm: A New Model for Small Open Economies

Dominant Currency Paradigm: A New Model for Small Open Economies
Author: Camila Casas
Publisher: International Monetary Fund
Total Pages: 62
Release: 2017-11-22
Genre: Business & Economics
ISBN: 1484330609

Most trade is invoiced in very few currencies. Despite this, the Mundell-Fleming benchmark and its variants focus on pricing in the producer’s currency or in local currency. We model instead a ‘dominant currency paradigm’ for small open economies characterized by three features: pricing in a dominant currency; pricing complementarities, and imported input use in production. Under this paradigm: (a) the terms-of-trade is stable; (b) dominant currency exchange rate pass-through into export and import prices is high regardless of destination or origin of goods; (c) exchange rate pass-through of non-dominant currencies is small; (d) expenditure switching occurs mostly via imports, driven by the dollar exchange rate while exports respond weakly, if at all; (e) strengthening of the dominant currency relative to non-dominant ones can negatively impact global trade; (f) optimal monetary policy targets deviations from the law of one price arising from dominant currency fluctuations, in addition to the inflation and output gap. Using data from Colombia we document strong support for the dominant currency paradigm.

Capital Mobility

Capital Mobility
Author: Leonardo Leiderman
Publisher: Cambridge University Press
Total Pages: 400
Release: 1994-07-14
Genre: Business & Economics
ISBN: 9780521454384

This edited volume examines capital mobility in both industrialised and developing countries.

Dynamic Disequilibrium Modeling: Theory and Applications

Dynamic Disequilibrium Modeling: Theory and Applications
Author: William A. Barnett
Publisher: Cambridge University Press
Total Pages: 556
Release: 1996-06-13
Genre: Business & Economics
ISBN: 9780521462754

. The organizers of the ninth symposium, which produced the current proceedings volume, were Claude Hillinger at the University of Munich, Giancarlo Gandolfo at the University of Rome "La Sapienza," A. R. Bergstrom at the University of Essex, and P. C. B. Phillips at Yale University.

Evolving Monetary Policy Frameworks in Low-Income and Other Developing Countries

Evolving Monetary Policy Frameworks in Low-Income and Other Developing Countries
Author: International Monetary Fund
Publisher: International Monetary Fund
Total Pages: 74
Release: 2015-10-23
Genre: Business & Economics
ISBN: 1498344062

Over the past two decades, many low- and lower-middle income countries (LLMICs) have improved control over fiscal policy, liberalized and deepened financial markets, and stabilized inflation at moderate levels. Monetary policy frameworks that have helped achieve these ends are being challenged by continued financial development and increased exposure to global capital markets. Many policymakers aspire to move beyond the basics of stability to implement monetary policy frameworks that better anchor inflation and promote macroeconomic stability and growth. Many of these LLMICs are thus considering and implementing improvements to their monetary policy frameworks. The recent successes of some LLMICs and the experiences of emerging and advanced economies, both early in their policy modernization process and following the global financial crisis, are valuable in identifying desirable features of such frameworks. This paper draws on those lessons to provide guidance on key elements of effective monetary policy frameworks for LLMICs.

Swiss Monetary History since the Early 19th Century

Swiss Monetary History since the Early 19th Century
Author: Ernst Baltensperger
Publisher: Cambridge University Press
Total Pages: 267
Release: 2017-08-03
Genre: Business & Economics
ISBN: 1108191444

This book describes the remarkable path which led to the Swiss Franc becoming the strong international currency that it is today. Ernst Baltensperger and Peter Kugler use Swiss monetary history to provide valuable insights into a number of issues concerning the organization and development of monetary institutions and currency that shaped the structure of financial markets and affected the economic course of a country in important ways. They investigate a number of topics, including the functioning of a world without a central bank, the role of competition and monopoly in money and banking, the functioning of monetary unions, monetary policy of small open economies under fixed and flexible exchange rates, the stability of money demand and supply under different monetary regimes, and the monetary and macroeconomic effects of Swiss Banking and Finance. Swiss Monetary History since the Early 19th Century illustrates the value of monetary history for understanding financial markets and macroeconomics today.

Annual Report on Exchange Arrangements and Exchange Restrictions 2013

Annual Report on Exchange Arrangements and Exchange Restrictions 2013
Author: International Monetary Fund. Monetary and Capital Markets Department
Publisher: International Monetary Fund
Total Pages: 105
Release: 2013-12-15
Genre: Business & Economics
ISBN: 1484366808

This is the 64th issue of the AREAER. It provides a description of the foreign exchange arrangements, exchange and trade systems, and capital controls of all IMF member countries. It also provides information on the operation of foreign exchange markets and controls on international trade. It describes controls on capital transactions and measures implemented in the financial sector, including prudential measures. In addition, it reports on exchange measures imposed by member countries for security reasons. A single table provides a snapshot of the exchange and trade systems of all IMF member countries. The Overview describes in detail how the general trend toward foreign exchange liberalization continued during 2012, alongside a strengthening of the financial sector regulatory framework. The AREAER is available in several formats. The Overview in print and online, and the detailed information for each of the 191 member countries and territories is included on a CD that accompanies the printed Overview and in an online database, AREAER Online. In addition to the information on the exchange and trade system of IMF member countries in 2012, AREAER Online contains historical data published in previous issues of the AREAER. It is searchable by year, country, and category of measure and allows cross country comparisons for time series.