Stabilization policy in an open-economy equilibrium model
Whether the interests of a nation are best served by maintaining fixed exchange rates or by allowing exchange rates to vary continues to be a much debated issue among economists. Most of the earlier literature on this topic focused attention on the two extremes of completely fixed exchange rates versus the perfectly flexible or free floating system, examining the circumstances (degree of factor mobility, structure and origin of disturbances, etc.) under which one or the other would be preferred. More recently, several authors have adopted a different perspective by which the fixed and free float regimes are considered endpoints on a continuous spectrum of exchange rate flexibility (e.g. Boyer (1978), Frenkel and Aizenman (1982), Roper and Turnovsky (1980)). Undoubtedly, this view was stimulated by the move toward a system of managed floating among the major world currencies since 1973, where governments intervene in foreign exchange markets to varying extents, but not enough to peg the exchange rate.
|Date of creation:||1984|
|Date of revision:|
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 85853
Web page: http://www.ifw-kiel.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gray, Jo Anna, 1976. "Wage indexation: A macroeconomic approach," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 221-235, April.
- Barro, Robert J., 1976. "Rational expectations and the role of monetary policy," Journal of Monetary Economics, Elsevier, vol. 2(1), pages 1-32, January.
- Weber, Warren E, 1981. "Output Variability under Monetary Policy and Exchange Rate Rules," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 733-51, August.
- Blanchard, Olivier Jean, 1979. "Wage Indexing Rules and the Behavior of the Economy," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 798-815, August.
- Herbert Giersch, 1973. "On the desirable degree of flexibility of exchange rates," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 109(2), pages 191-213, June.
- Sargent, Thomas J & Wallace, Neil, 1975. ""Rational" Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 241-54, April.
- Don E. Roper & Stephen J. Turnovsky, 1980. "Optimal Exchange Market Intervention in a Simple Stochastic Macro Model," Canadian Journal of Economics, Canadian Economics Association, vol. 13(2), pages 296-309, May.
- Boyer, Russell S, 1978. "Optimal Foreign Exchange Market Intervention," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 1045-55, December.
When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:197. 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: (Dieter Stribny)The email address of this maintainer does not seem to be valid anymore. Please ask Dieter Stribny to update the entry or send us the correct email address
If references are entirely missing, you can add them using this form.