Fixed vs. floating exchange rates: A dynamic general equilibrium analysis
In this study we contrast fixed and floating exchange rate regimes in a dynamic general equilibrium model. We find that the fundamental difference in the regimes is in the courses they imply for monetary policies. Because of policy coordination requirements, a tighter monetary policy needed to maint...
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| Veröffentlicht in: | European economic review 1998-07, Vol.42 (7), p.1221-1249 |
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| container_title | European economic review |
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| creator | Chin, Daniel M. Miller, Preston J. |
| description | In this study we contrast fixed and floating exchange rate regimes in a dynamic general equilibrium model. We find that the fundamental difference in the regimes is in the courses they imply for monetary policies. Because of policy coordination requirements, a tighter monetary policy needed to maintain a fixed exchange rate may necessitate a tightening in budget policy as well. We show that under some initial conditions voters or a social planner will favor one regime, but under other conditions they will favor the other. However, the choices of voters and a social planner are almost diametrically opposed. |
| doi_str_mv | 10.1016/S0014-2921(97)00069-X |
| format | Article |
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| ispartof | European economic review, 1998-07, Vol.42 (7), p.1221-1249 |
| issn | 0014-2921 1873-572X |
| language | eng |
| recordid | cdi_proquest_miscellaneous_38614203 |
| source | Elsevier ScienceDirect Journals Complete - AutoHoldings; RePEc; Periodicals Index Online |
| subjects | Budgetary policy Comparative analysis Dynamic general equilibrium Dynamic models Equilibrium Exchange rate policy Exchange rate regimes Exchange rates Fixed exchange rates Floating exchange rates Foreign exchange rates General economic equilibrium Mathematical models Monetary policy Policy co-ordination Social planning Studies Voting behaviour |
| title | Fixed vs. floating exchange rates: A dynamic general equilibrium analysis |
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