20 research outputs found
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Partial delegation in a model of currency crisis
Stressing the inĂuence of expected devaluation on currency crises, this paper shows that, in a
Ăxed exchange-rate system with an escape clause, partial delegation of exchange-rate policy to an
inĂation-averse central banker reduces the probability of crisis
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How To Avoid Self-fulfilling Crises
Obstfeld (1994) shows that a currency crisis can be explained by the occurrence of multiple equi-
libria (2 interior equilibria). For the same level of economic fundamentals, it may be optimal for
the government either to devalue or to maintain the peg. The decision depends on the inĂationary
expectations of economic agents: it is the phenomenon of self-fulĂlling crisis. In order to avoid this
kind of crisis, this article offers a new proposal: a partial delegation of exchange rate policy to a more
inĂation-averse central banker. It shows that if the government continues to decide whether to main-
tain the peg while the central banker chooses the magnitude of any realignment, lower inĂationary
expectations will lead to the existence of only one equilibrium. The probability of crisis will then be
considerably reduced and a currency crisis will occur only if negative shocks substantially damage the
level of economic fundamentals
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Optimal non-linear monetary policy rules
We propose a simply yet flexible framework for the analysis of optimal monetary policy
rules that produces the type of non-linear responses derived in the literature as
special cases. Perhaps more importantly, our framework suggests a richer set of nonlinear
responses than have been considered yet and thus may prompt further work in
this area
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Targets, Zones and Asymmetries: A Flexible Nonlinear model of Recent UK Monetary Policy
We estimate a flexible model of the behaviour of UK monetary policymakers in the era of
inflation targeting based on a new representation of policymakerâs preferences. This enables
us to address a range of issues that are beyond the scope of the existing literature. We find a
complex relationship between interest rates and inflation: interest rates are passive when
inflation is close to the target but there is an increasingly vigorous response as inflation
deviates further from the target. We also find that the response to the output gap is linear and
find no evidence of a nonlinear Phillips curve
The Perverse Response of Interest Rates
We argue that an increase in aggregate demand can lead to a reduction in the interest rate.
This apparently perverse optimal response of interest rates can occur when the Phillips curve
is non-linear. In that case, an increase in aggregate demand tends to increase inflation and
output but also to change the weight on inflation in the optimal monetary policy rule. Although
the first two effects tend to increase interest rates, the latter effect can imply lower interest
rates. If this effect dominates, interest rates can fall
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Are currency crises self-fulfilling? The case of Argentina
This paper analyzes the 2002 Argentine crisis using the Jeanne and Masson (2000)
model with sunspots. Testing this model empirically through a Markov-switching model
suggests that self-sulfilling prophecies is a reasonable explanation for the devaluation of
the peso
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Non-linear and non-symmetric exchange-rate adjustment: new evidence from medium and high inflation countries
This paper analyses a model of non-linear exchange rate adjustment that extends the
literature by allowing asymmetric responses to over- and under-valuations. Applying
the model to Greece and Turkey, we find that adjustment is asymmetric and that
exchange rates depend on the sign as well as the magnitude of deviations, being more
responsive to over-valuations than under-valuations. Our findings support and extend
the argument that non-linear models of exchange rate adjustment can help to overcome
anomalies in exchange rate behaviour. They also suggest that exchange rate adjustment
is non-linear in economies where fundamentals models work well
VOLUMEN 15, NĂMERO 29 (1981-1982)
USO DEL COMPUTADOR EN EL ANĂLISIS SEDIMENTOLĂGICO Y DE MIGRACIĂN DE FLUIDOS Y SU APLICACIĂN EN EL NOROCCIDENTE COLOMBIANO. Castro, A. E.; Molina, G. J.UN MODELO ESTRUCTURAL PARA EL VALLE DEL CAUCA Y SUS IMPLICACIONES HIDROGEOLĂGICAS Y MINERAS. Padilla, L. E.TECTĂNICA DE SOBRECORRIMIENTO Y SUS IMPLICACIONES ESTRUCTURALES EN EL ĂREA PAMPLONA - CORDILLERA ORIENTAL DE COLOMBIA. Boinet, T.; Bourgois, J.; Mendoza F. HGEOLOGĂA DE LAS LATERITAS NIQUELĂFERAS DE CERRO MATOSO S. A. MejĂa, V. M.; Durango, J. R.COMPLEJO OFIOLĂTICO EN LA CUENCA DEL RĂO GUAPI. Ortega Montero, C.DETERMINACIĂN DE RESERVAS DE DEPĂSITOS MINERALES. HernĂĄndez Garay, H.CARACTERIZACIĂN, RANGO Y CLASIFICACIĂN DE CARBONES. RamĂrez Castro, P
VOLUMEN 15, NĂMERO 29 (1981-1982)
USO DEL COMPUTADOR EN EL ANĂLISIS SEDIMENTOLĂGICO Y DE MIGRACIĂN DE FLUIDOS Y SU APLICACIĂN EN EL NOROCCIDENTE COLOMBIANO. Castro, A. E.; Molina, G. J.UN MODELO ESTRUCTURAL PARA EL VALLE DEL CAUCA Y SUS IMPLICACIONES HIDROGEOLĂGICAS Y MINERAS. Padilla, L. E.TECTĂNICA DE SOBRECORRIMIENTO Y SUS IMPLICACIONES ESTRUCTURALES EN EL ĂREA PAMPLONA - CORDILLERA ORIENTAL DE COLOMBIA. Boinet, T.; Bourgois, J.; Mendoza F. HGEOLOGĂA DE LAS LATERITAS NIQUELĂFERAS DE CERRO MATOSO S. A. MejĂa, V. M.; Durango, J. R.COMPLEJO OFIOLĂTICO EN LA CUENCA DEL RĂO GUAPI. Ortega Montero, C.DETERMINACIĂN DE RESERVAS DE DEPĂSITOS MINERALES. HernĂĄndez Garay, H.CARACTERIZACIĂN, RANGO Y CLASIFICACIĂN DE CARBONES. RamĂrez Castro, P