The Mirage of Fixed Exchange Rates
This paper discusses the profound difficulties of maintaining fixed exchange rates in a world of expanding global capital markets. Contrary to popular wisdom, industrialized-country monetary authorities easily have the resources to defend exchange parities against virtually any private speculative a...
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| Veröffentlicht in: | The Journal of economic perspectives 1995-10, Vol.9 (4), p.73-96 |
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| container_end_page | 96 |
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| container_start_page | 73 |
| container_title | The Journal of economic perspectives |
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| creator | Obstfeld, Maurice Rogoff, Kenneth |
| description | This paper discusses the profound difficulties of maintaining fixed exchange rates in a world of expanding global capital markets. Contrary to popular wisdom, industrialized-country monetary authorities easily have the resources to defend exchange parities against virtually any private speculative attack. But if their commitment to use those resources lacks credibility with markets, the costs to the broader economy of defending an exchange-rate peg can be very high. The dynamic interplay between credibility and commitment is illustrated by the 1992 Swedish and British crises and the 1994-95 Mexican collapse. The authors also discuss the small number of successful fixers. |
| doi_str_mv | 10.1257/jep.9.4.73 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0895-3309 |
| ispartof | The Journal of economic perspectives, 1995-10, Vol.9 (4), p.73-96 |
| issn | 0895-3309 1944-7965 |
| language | eng |
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| source | Elektronische Zeitschriftenbibliothek - Frei zugängliche E-Journals; Business Source Complete; Periodicals Index Online; JSTOR Archive Collection A-Z Listing; American Economic Association Web |
| subjects | Capital losses Capital market Capital markets Central banks Currencies Currency Developing countries Exchange rates Fixed exchange rates Fixed interest rates Fixed rates Floating exchange rates Foreign exchange markets Foreign exchange rates Inflation Inflation rates Interest rates Intervention LDCs Monetary policy Parity Real exchange rates Supplies Symposia: The Monetary Transmission Mechanism |
| title | The Mirage of Fixed Exchange Rates |
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