To what degree do central banks sterilize the effects of capital flows on domestic money supply?
Under the current system of managed float exchange rates, large countries are able to absorb changes in their balance-of-payments by either manipulating international reserves to sterilize capital flows or by accepting changes in their exchange rates. In this system, the monetary authorities of the G7 countries have found it beneficial to sterilize capital flows thereby stabilizing their exchange rates and gaining greater control of their domestic money supply. Previous empirical work on the effects of sterilization were conducted using shortrun models on fixed exchange rates. Using the monetary approach to the balance-of-payments which emphasizes the money market from which balance-of-payments imbalances are derived, this article combines the current managed float system of exchange rates with cointegration techniques in considering the long-run relationship that has developed between the monetary base and money demand of the G7 countries from sterilized capital flows.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 7 (2000)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEL20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEL20|
When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:7:y:2000:i:1:p:15-19. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.