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International exchange rate systems: Where do we stand?

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  • Siebert, Horst

Abstract

This paper analyzes institutional arrangements for exchange rate systems and reviews what we know. It looks at the foreign exchange market, different balance of payment situations in which countries find themselves and the necessary exchange rate adjustments. It studies the options that are available to countries in choosing their exchange rate system (type of nominal anchor, nominal anchor versus real target and the degree of sovereignty to be given up) and reviews the historical experience for multilateral options. The actual system is a fragile low-inflation central bank dominated arrangement. Options for the future rest on quite a few idealistic ideas. In addition to choosing the exchange rate system, adopting the right exchange rate is also addressed.

Suggested Citation

  • Siebert, Horst, 2006. "International exchange rate systems: Where do we stand?," Kiel Working Papers 1288, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1288
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    File URL: https://www.econstor.eu/bitstream/10419/3859/1/kap1288.pdf
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    References listed on IDEAS

    as
    1. McKinnon, Ronald I, 1982. "Currency Substitution and Instability in the World Dollar Standard," American Economic Review, American Economic Association, vol. 72(3), pages 320-333, June.
    2. Menzie Chinn & Jeffrey A. Frankel, 2007. "Will the Euro Eventually Surpass the Dollar as Leading International Reserve Currency?," NBER Chapters, in: G7 Current Account Imbalances: Sustainability and Adjustment, pages 283-338, National Bureau of Economic Research, Inc.
    3. Jeffrey A. Frankel, 1999. "No Single Currency Regime is Right for All Countries or At All Times," NBER Working Papers 7338, National Bureau of Economic Research, Inc.
    4. Stein L., 2001. "The Equilibrium Value of The Euro/$ US Exchange Rate: An Evaluation of Research," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 73-108, January -.
    5. Alan Ahearne & Jürgen von Hagen, 2005. "Global current account imbalances- how to manage the risk for Europe," Policy Briefs 231, Bruegel.
    6. Jerome L. Stein, 2001. "The Equilibrium Value of the Euro/$ US Exchange Rate: An Evaluation of Research," CESifo Working Paper Series 525, CESifo.
    7. Siebert, Horst, 2006. "China: Understanding a new global economic player," Kiel Working Papers 1278, Kiel Institute for the World Economy (IfW Kiel).
    8. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584-584.
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    Cited by:

    1. Heinz Handler, 2008. "Vom Bancor zum Euro. Und weiter zum Intor?," WIFO Working Papers 317, WIFO.

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    More about this item

    Keywords

    Balance of payments situations; External and internal equilibrium; Choosing the exchange rate system; Exchange rate systems;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • E - Macroeconomics and Monetary Economics
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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