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International Monetary Regimes and Incidence and Transmission of Macroeconomic Shocks: Evidence from the Bretton Woods and Modern Floating Periods

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  • Selahattin Dibooğlu

Abstract

This paper investigates the relationship between international monetary regimes and incidence and transmission of macroeconomic shocks within the context of an open‐economy macro model. Empirical results confirm monetary interdependence and lower incidence of monetary discretion under fixed exchange rates. The average magnitude and dispersion of supply shocks in Bretton Woods and the subsequent float is comparable; however, the average magnitude and dispersion of real demand shocks under Bretton Woods seems higher. Overall, the international monetary regime may pose important constraints to policymakers in open economies.

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  • Selahattin Dibooğlu, 2000. "International Monetary Regimes and Incidence and Transmission of Macroeconomic Shocks: Evidence from the Bretton Woods and Modern Floating Periods," Southern Economic Journal, John Wiley & Sons, vol. 66(3), pages 590-608, January.
    • Handle: RePEc:wly:soecon:v:66:y:2000:i:3:p:590-608
    DOI: 10.1002/j.2325-8012.2000.tb00276.x
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