The global implications of regional exchange rate regimes
AbstractWe examine the implications of a regional fixed exchange rate regime for global exchange rate volatility. We find that the concept of the optimum currency area plays a key role. There are significant effects on the volatility of the remaining flexible parities when the countries participating in the regional peg Â¡V the Â¡Â§insÂ¡Â¨ Â¡V are not an optimum currency area. Or, but to a smaller extent, when the Â¡Â§insÂ¡Â¨ and the Â¡Â§outsÂ¡Â¨ are asymmetric with regard to labor market flexibility and monetary policy conduct. Our analysis also suggests that greater global exchange rate stability would be more likely to be obtained if the U.S. rather than the EU targeted the EUR/USD rate.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of International Money and Finance.
Volume (Year): 24 (2005)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/inca/30443
Other versions of this item:
- Harris Dellas & George Tavlas, 2003. "The Global Implications of Regional Exchange Rate Regimes," Working Papers 082003, Hong Kong Institute for Monetary Research.
- Harris Dellas & George S. Tavlas, 2004. "The Global Implications of Regional Exchange Rate Regines," Working Papers 18, Bank of Greece.
- E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
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