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The Case for Joint Management of Exchange Rate Flexibility

Author

Listed:
  • C. Fred Bergsten

    () (Peterson Institute for International Economics)

  • Olivier Davanne

    (Conseil d'Analyse Economique)

  • Pierre Jacquet

    (Peterson Institute for International Economics)

Abstract

The succession of severe financial and exchange rate crises in recent years has given a new sense of urgency to the debate on the "international financial architecture." Given the severity of these events, it is hard to justify the claim made by some that what is really at issue is a coincidence of local, independent mistakes rationally sanctioned by investors.1 While studying the local, specific origins of each of the recent crises may provide useful insights on how to behave in today's highly interdependent international economy and how to accommodate "hot" capital flows, it is essential to focus on the systemic reasons why such crises occur as they have such severe implications.

Suggested Citation

  • C. Fred Bergsten & Olivier Davanne & Pierre Jacquet, 1999. "The Case for Joint Management of Exchange Rate Flexibility," Working Paper Series wp99-9, Peterson Institute for International Economics.
  • Handle: RePEc:iie:wpaper:wp99-9
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    References listed on IDEAS

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    1. Leonardo Bartolini & Avinash Dixit, 1991. "Market Valuation of Illiquid Debt and Implications for Conflicts among Creditors," IMF Staff Papers, Palgrave Macmillan, vol. 38(4), pages 828-849, December.
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    3. Amar Bhattacharya & Marcus Miller, 1999. "Coping with Crises: Is There a "Silver Bullet"?," CSGR Hot Topics: Research on Current Issues 06, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
    4. Stanley Fischer, 1999. "On the Need for an International Lender of Last Resort," Journal of Economic Perspectives, American Economic Association, pages 85-104.
    5. Jeremy Bulow & Kenneth Rogoff, 1991. "Sovereign Debt Repurchases: No Cure for Overhang," The Quarterly Journal of Economics, Oxford University Press, pages 1219-1235.
    6. Maurice Obstfeld & Kenneth S. Rogoff, 1996. "Foundations of International Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262150476, January.
    7. Buiter, Willem H & Sibert, Anne C, 1999. "UDROP: A Contribution to the New International Financial Architecture," International Finance, Wiley Blackwell, vol. 2(2), pages 227-247, July.
    8. Buiter, Willem H. & Sibert, Anne, 1999. "UDROP: A Small Contribution to the New International Financial Architecture," CEPR Discussion Papers 2138, C.E.P.R. Discussion Papers.
    9. Cohen, Daniel, 1993. "A valuation formula for LDC debt," Journal of International Economics, Elsevier, pages 167-180.
    10. Jeremy Bulow & Kenneth Rogoff, 1988. "The Buyback Boondoggle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 675-704.
    11. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, January.
    12. Maurice Obstfeld, 1994. "The Logic of Currency Crises," NBER Working Papers 4640, National Bureau of Economic Research, Inc.
    13. Jonathan Eaton & Mark Gersovitz, 1981. "Debt with Potential Repudiation: Theoretical and Empirical Analysis," Review of Economic Studies, Oxford University Press, vol. 48(2), pages 289-309.
    14. Marcus Miller & Lei Zhang, 1998. "Macroeconomic Policy Options for Managing Capital Flows," CSGR Hot Topics: Research on Current Issues 01, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
    15. Barry J. Eichengreen, 1999. "Toward a New International Financial Architecture: A Practical Post-Asia Agenda," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 51.
    16. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    17. Lambrecht, Bart & Perraudin, William, 1996. "Creditor races and contingent claims," European Economic Review, Elsevier, vol. 40(3-5), pages 897-907, April.
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    Cited by:

    1. Thomas I. Palley, 2006. "The Fallacy of the Revised Bretton Woods Hypothesis: Why Today’s System is Unsustainable and Suggestions for a Replacement," Working Papers wp114, Political Economy Research Institute, University of Massachusetts at Amherst.
    2. Hoarau, Jean-François, 2013. "Un modèle NATREX synthétique pour une petite économie « développée » ouverte contrainte sur les marchés internationaux de capitaux," L'Actualité Economique, Société Canadienne de Science Economique, vol. 89(4), pages 259-303, Décembre.
    3. Thomas I. Palley, 2006. "The Fallacy of the Revised Bretton Woods Hypothesis: Why TodayÕs International Financial System Is Unsustainable," Economics Public Policy Brief Archive ppb_85, Levy Economics Institute.
    4. Ramkishen S. Rajan & Tony Cavoli, 2010. "Exchange Rate Arrangements For East Asia Post-Crisis: Examining The Case For Open Economy Inflation Targeting," Working Papers id:2718, eSocialSciences.
    5. Tony Cavoli & Ramkishen Rajan, 2003. "Exchange Rate Arrangements for East Asia Post-Crisis: Examining the Case for Open Economy Inflation Targeting," Centre for International Economic Studies Working Papers 2003-10, University of Adelaide, Centre for International Economic Studies.
    6. Hoarau, Jean-François, 2009. "L’approche microéconomique du taux de change réel d’équilibre : une revue de la littérature théorique," L'Actualité Economique, Société Canadienne de Science Economique, vol. 85(4), pages 403-436, décembre.

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