IDEAS home Printed from https://ideas.repec.org/p/uct/uconnp/2007-34.html
   My bibliography  Save this paper

Monetary Policy Under a Currency Board

Author

Listed:
  • Marius Jurgilas

    (University of Connecticut and Elon University)

Abstract

The consensus view is that central banks under currency boards do not have tools for active monetary policy. In this paper, we analyze the foreign exchange fee as a monetary policy instrument that can be used by a central bank under a currency board. We develop a general equilibrium model showing that changes in this fee may have the same effects as a change in the monetary policy stance. Thus central banks under the currency board are shown to have an avenue to implement active monetary policy.

Suggested Citation

  • Marius Jurgilas, 2007. "Monetary Policy Under a Currency Board," Working papers 2007-34, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2007-34
    as

    Download full text from publisher

    File URL: https://media.economics.uconn.edu/working/2007-34.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nie, Pu-yan & Chen, Li-hua & Fukushima, Masao, 2006. "Dynamic programming approach to discrete time dynamic feedback Stackelberg games with independent and dependent followers," European Journal of Operational Research, Elsevier, vol. 169(1), pages 310-328, February.
    2. Ambler, Steve & Paquet, Alain, 1997. "Recursive methods for computing equilibria of general equilibrium dynamic Stackelberg games," Economic Modelling, Elsevier, vol. 14(2), pages 155-173, April.
    3. Marius Jurgilas, 2005. "Interbank market under the currency board: Case of Lithuania," Computing in Economics and Finance 2005 448, Society for Computational Economics.
    4. Marius Jurgilas, 2006. "Interbank Markets under Currency Boards," Working papers 2006-19, University of Connecticut, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dennis, Richard, 2013. "Asset Prices, Business Cycles, and Markov-Perfect Fiscal Policy when Agents are Risk-Sensitive," SIRE Discussion Papers 2013-79, Scottish Institute for Research in Economics (SIRE).
    2. Rodrigo Suescún M., 2000. "Optimical Commodity Price Stabilizador Over the Business Cycle," Borradores de Economia 154, Banco de la Republica de Colombia.
    3. Camilo González & Luisa Silva & Carmiña Vargas & Andrés M. Velasco, 2014. "Uncertainty in the Money Supply Mechanism and Interbank Markets in Colombia," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República - ESPE, vol. 32(73), pages 36-49, July.
    4. Nuno Faísca & Pedro Saraiva & Berç Rustem & Efstratios Pistikopoulos, 2009. "A multi-parametric programming approach for multilevel hierarchical and decentralised optimisation problems," Computational Management Science, Springer, vol. 6(4), pages 377-397, October.
    5. Julien, Ludovic A., 2017. "On noncooperative oligopoly equilibrium in the multiple leader–follower game," European Journal of Operational Research, Elsevier, vol. 256(2), pages 650-662.
    6. Kicsiny, R. & Varga, Z. & Scarelli, A., 2014. "Backward induction algorithm for a class of closed-loop Stackelberg games," European Journal of Operational Research, Elsevier, vol. 237(3), pages 1021-1036.
    7. Ambler, Steve & Paquet, Alain, 1996. "Fiscal spending shocks, endogenous government spending, and real business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 20(1-3), pages 237-256.
    8. Ambler, Steve & Cardia, Emanuela & Farazli, Jeannine, 1999. "Export promotion, learning by doing and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 23(5-6), pages 747-772, April.
    9. Jérôme Vandenbussche & Mr. Stanley B Watt & Szabolcs Blazsek, 2009. "The Liquidity and Liquidity Distribution Effects in Emerging Markets: The Case of Jordan," IMF Working Papers 2009/228, International Monetary Fund.
    10. Yifen Mu, 2014. "Inverse Stackelberg Public Goods Game with Multiple Hierarchies Under Global and Local Information Structures," Journal of Optimization Theory and Applications, Springer, vol. 163(1), pages 332-350, October.
    11. Ambler, Steve & Pelgrin, Florian, 2010. "Time-consistent control in nonlinear models," Journal of Economic Dynamics and Control, Elsevier, vol. 34(10), pages 2215-2228, October.
    12. Dan Protopopescu, 2009. "Dynamic Stackelberg Game with Risk-Averse Players: Optimal Risk-Sharing under Asymmetric Information," UFAE and IAE Working Papers 797.09, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    13. D. W. K. Yeung & L. A. Petrosyan, 2011. "Subgame Consistent Cooperative Solution of Dynamic Games with Random Horizon," Journal of Optimization Theory and Applications, Springer, vol. 150(1), pages 78-97, July.
    14. Nie, Pu-yan & Chen, Li-hua & Fukushima, Masao, 2006. "Dynamic programming approach to discrete time dynamic feedback Stackelberg games with independent and dependent followers," European Journal of Operational Research, Elsevier, vol. 169(1), pages 310-328, February.
    15. Lu, Jye-Chyi & Tsao, Yu-Chung & Charoensiriwath, Chayakrit, 2011. "Competition under manufacturer service and retail price," Economic Modelling, Elsevier, vol. 28(3), pages 1256-1264, May.
    16. Ambler, Steve, 1999. "Les modèles à agent représentatif et la politique de taxation optimale," L'Actualité Economique, Société Canadienne de Science Economique, vol. 75(4), pages 539-557, décembre.
    17. Wernz, Christian & Deshmukh, Abhijit, 2012. "Unifying temporal and organizational scales in multiscale decision-making," European Journal of Operational Research, Elsevier, vol. 223(3), pages 739-751.
    18. Matthias Pilz & Luluwah Al-Fagih, 2020. "A Dynamic Game Approach for Demand-Side Management: Scheduling Energy Storage with Forecasting Errors," Dynamic Games and Applications, Springer, vol. 10(4), pages 897-929, December.
    19. Ambler, Steve & Bouakez, Hafedh & Cardia, Emanuela, 2017. "Does the crowding-in effect of public spending on private consumption undermine neoclassical models?," Research in Economics, Elsevier, vol. 71(3), pages 399-410.
    20. Richárd Kicsiny, 2017. "Solution for a class of closed-loop leader-follower games with convexity conditions on the payoffs," Annals of Operations Research, Springer, vol. 253(1), pages 405-429, June.

    More about this item

    Keywords

    interbank market; monetary policy; currency board;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uct:uconnp:2007-34. 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: . General contact details of provider: https://edirc.repec.org/data/deuctus.html .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark McConnel (email available below). General contact details of provider: https://edirc.repec.org/data/deuctus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.