1,721,380 research outputs found
A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform
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Intenational Currency Experience: New Lessons and Lessons Relearned
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Competitiveness, Realignment, and Speculation: The Role of Financial Markets
Full text linkCurrent and planned measures liberalizing the external capital accounts of France and Italy call into question the continued viability of the policy of periodic exchange-rate realignment followed to date in the European Monetary System (EMS). This paper is intended as a first step in studying the real and monetary effects of EMS-style realignments in a setting of free cross-border financial flows. The first set of results derived concerns a situation in which there are no fundamental factors behind domestic inflation. Under a policy regime in which domestic inflation automatically triggers devaluation, the economy can undergo self-fulfilling depreciation-inflation spirals, triggered by speculative attack on the exchange rate. Such spirals do not occur when realignments do not offset past inflation fully. The second set of results shows how an exchange rate collapse can occur after inflation is set off by expansionary fiscal policy. Sometimes, but not always, the crisis will be preceded by a period of capital inflows and real currency appreciation. In other cases fiscal expansion may set off an immediate crisis.
CRITICAL REVIEW OF “INTERNATIONAL MONETARY RELATIONS: TAKING FINANCE SERIOUSLY” : by Maurice Obstfeld and Alan M. Taylor
No full textThis is a Critical Review of the article "International Monetary Relations: Taking Finance Seriously", originally published by Maurice Obstfeld and Alan M. Taylor in the Journal of Economic Perspectives, in 2017. The autor Gloria Sandi reviews Obstfeld and Taylor's explanation on the interactions between the international monetary and financial systems as an important determinant for the world to achieve its economic potential and to measure how grave are the prospects of crises and disruption, as well as their proposal of a financial policy trilemma
The Effectiveness of Foreign-Exchange Intervention: Recent Experience
Full text linkSince the September 1985 Plaza Hotel announcement by the Group of Five industrial countries, a substantial realignment of exchange rates has been achieved. At the same time, foreign exchange market intervention, much of it concerted and much of it sterilized, has been undertaken on a scale not seen since the early 1970s This paper takes a fresh look at the effectiveness of sterilized intervention in the light of recent experience. The paper concludes that sterilized intervention, in itself, has played an unimportant role in promoting exchange-rate realignment. Instead, clear shifts in patterns of monetary and fiscal policy appear to have been the main medium-term policy factors determining currency values. Over certain shorter time periods, intervention has influenced exchange markets through a signalling channel; but this signalling effect has been operative only as a result of authorities' frequent readiness to adjust monetary policies promptly to counteract unwelcome exchange-market pressures. The paper makes some progress in formalizing reasons why intervention might enhance the credibility of messages that governments could convey as well through simple verbal announcements.
Application of the funding GAP method in the process of financing regional development in Romania
Full text linkThe present paper aims at analyzing the framework and the methodology for applying the funding gap method in order to determine the level of structural funds co-financing in the process of financing regional development in Romania, through the Regional Operational Programme (ROP) co-financed from the European Fund for Regional Development (ERDF).structural funds, GAP method, regional development
Rational and Self-Fulfilling Balance-of-Payments Crises
Full text linkThe recent balance-of-payments literature shows that-speculative attacks on a pegged exchange rate must sometimes-occur if the path of the rate is riot to offer abnormal profit opportunities. Such attacks are fully rational, as they reflect the market's response to a regime breakdown that is inevitable.This paper shows that, given certain expectations about policy, balance-of-payments crises can also be purely self-fulfilling events. In such cases even a permanently viable regime maybreak down, and the economy will possess multiple equilibria corresponding to different subjective assessments of the probability of collapse. The behavior of domestic interest rates and foreign reserves will naturally reflect the possibility of a speculative attack. Work on foreign-exchange crises derives from the natural-resource literature initiated by Salant and Henderson (1978),where the definition of "abnormal" profit opportunities is straightforward. Because the definition is not always straight-forward in a monetary context, this paper also shows how crises occur in a discrete-time stochastic monetary model when an eventual breakdown is inevitable.
Some remarks of the recent "quantitative easing" action take by FED
Full text linkOn March 18th 2009, FED has made a move it haven’t done since 1960 (the so-called Operation Trust conceived by the Kennedy administration): it steped into the market in order to buy long term securities for an amount of some 1.25 trillion dollars. FED also announced a program to restart consumer and small businesses lending. FED also said this program could be expanded to include a lot of other financial assets. The key issue here is the money resulting from this quantitative easing action taken by FED has not US economy as main destination, but, throw IMF, US are due to become the main creditor of the world.market, consumer, small businesses, lending
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