1.

Record Nr.

UNINA9910954942103321

Autore

Gagnon Joseph E

Titolo

Flexible exchange rates for a stable world economy / / Joseph E. Gagnon ; with Marc Hinterschweiger

Pubbl/distr/stampa

Washington, D.C., : Peterson Institute for International Economics, c2011

ISBN

1-283-31968-3

9786613319685

0-88132-635-6

Edizione

[1st ed.]

Descrizione fisica

1 online resource (300 p.)

Altri autori (Persone)

HinterschweigerMarc

Disciplina

332.4/562

Soggetti

Foreign exchange rates

Monetary policy

Lingua di pubblicazione

Inglese

Formato

Materiale a stampa

Livello bibliografico

Monografia

Note generali

Bibliographic Level Mode of Issuance: Monograph

Nota di bibliografia

Includes bibliographical references and index.

Nota di contenuto

Introduction and overview -- A world of multiple monies -- Are floating exchange rates too volatile? -- Do volatile exchange rates reduce economic output? -- Do volatile exchange rates destabilize inflation and output? -- Monetary policy with fixed and floating exchange rates -- Fiscal policy and exchange rate regimes -- Exchange rate regimes in developing economies -- Policy conclusions -- References -- Index.

Sommario/riassunto

Volatile exchange rates and how to manage them are a contentious topic whenever economic policymakers gather in international meetings. This book examines the broad parameters of exchange rate policy in light of both high-powered theory and real-world experience. What are the costs and benefits of flexible versus fixed exchange rates? How much of a role should the exchange rate play in monetary policy? Why don't volatile exchange rates destabilize inflation and output?The principal finding of this book is that using monetary policy to fight exchange rate volatility, including through the adoption of a fixed exchange rate regime, leads to greater volatility of employment, output, and inflation. In other words, the cure for exchange rate volatility is worse than the disease. This finding is demonstrated in economic models, in historical case studies, and in statistical analysis



of the data. The book devotes considerable attention to understanding the reasons why volatile exchange rates do not destabilize inflation and output.The book concludes that many countries would benefit from allowing greater flexibility of their exchange rates in order to target monetary policy at stabilization of their domestic economies. Few, if any, countries would benefit from a move in the opposite direction.