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Flexible Exchange Rates (flexible + exchange_rate)

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Business, Economics, Finance and Accounting100%

Terms modified by Flexible Exchange Rates

  • flexible exchange rate regime
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    Selected Abstracts

    Fixed versus Flexible Exchange Rates: Evidence from Developing Countries

    ECONOMICA, Issue 295 2007
    MATHIAS HOFFMANN
    This paper investigates the hypothesis that in a small open economy flexible exchange rates act as a ,shock absorber' and mitigate the effects of external shocks more effectively than fixed exchange rate regimes. Using a sample of 42 developing countries, the paper assesses whether the responses of real GDP, the trade balance and the real exchange rate to world output and world real interest rate shocks differ across exchange rate regimes. The paper shows that there are significant differences in the variability of macroeconomic aggregates under fixed and flexible exchange rate regimes. [source]

    AS-AD REVISITED: OVERSHOOTING ADJUSTMENT DYNAMICS UNDER NAÏVE EXPECTATIONS

    METROECONOMICA, Issue 4 2008
    Harald Badinger
    ABSTRACT We analyse the adjustment dynamics from a short-term to a medium-term equilibrium in a standard AS-AD model à la Blanchard (2006, Macroeconomics, 4th edn, Prentice-Hall, Upper Saddle River, NJ) for an open economy with fixed and flexible exchange rates. An explicit analysis suggests the local stability of the medium-term equilibrium. However, an overshooting adjustment dynamics is possible for the exchange rate, a result that directly relates to the famous Dornbusch (1976, Journal of Political Economy, 84, pp. 1161,1176) analysis. In contrast to the latter, in the Blanchard framework it is obtained without assuming rational expectations and without relying upon saddle-path stability. [source]

    EXCHANGE RATE STABILISATION, LEARNING AND THE TAYLOR PRINCIPLE

    AUSTRALIAN ECONOMIC PAPERS, Issue 2 2007
    Article first published online: 30 MAY 200, HEINZ-PETER SPAHN
    The paper explores whether central banks can keep their interest rates independent from given foreign rates, and to what extent interest policies designed to stabilise nominal exchange rate changes can be applied instead of, or in addition to, the traditional interest rate response to inflation gaps. This modification of a Taylor Rule is analysed in a simple macro model with some New Keynesian features. Information is imperfect; agents cannot build rational expectations but try to learn ,true' market relations. Results show that the Taylor Principle can be generalised in an open economy with flexible exchange rates. [source]