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Exchange Rate Regime And Macroeconomic Stability. A Literature Survey

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  • Patricia Amalia MERCEA (HANDRO)

    (University of Craiova, Romania)

Abstract

Globalization and short-term capital inflow volatilities generate challenges for policies and countries, as well as for global and regional markets. An appropriate exchange rate policy tool, complemented by reserve accumulation, macroprudential measures and, when needed, capital control is some of the instruments that could produce effective safety nets and macro stability. A conclusion of our research is that flexible regimes are preferred by developed countries, with credible institutions that rely on deep capital markets. Emerging economies with unreliable institutions prefer stability as the fixed rate gives credibility and the macroeconomic stability can be achieved without best macro conditions.

Suggested Citation

  • Patricia Amalia MERCEA (HANDRO), 2020. "Exchange Rate Regime And Macroeconomic Stability. A Literature Survey," Contemporary Economy Journal, Constantin Brancoveanu University, vol. 5(1), pages 67-71.
    • Handle: RePEc:brc:brccej:v:5:y:2020:i:1:p:67-71
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    More about this item

    Keywords

    Exchange rate; Exchange rate volatility; International Trade; Stable Growth; Macroeconomic stability;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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