Search Result

Srl

Item

ID: 109583

Fear of floating and de facto exchange rate pegs with multiple / Plumper, Thomas; Neumayer, Eric

Neumayer, Eric	Journal Article
	0 Rating(s) & 0 Review(s)

Publication

2011.

Summary/Abstract

This paper adopts and develops the "fear of floating" theory to explain the decision to implement a de facto peg, the choice of anchor currency among multiple key currencies, and the role of central bank independence for these choices. We argue that since exchange rate depreciations are passed-through into higher prices of imported goods, avoiding the import of inflation provides an important motive to de facto peg the exchange rate in import-dependent countries. This study shows that the choice of anchor currency is determined by the degree of dependence of the potentially pegging country on imports from the key currency country and on imports from the key currency area, consisting of all countries which have already pegged to this key currency. The fear of floating approach also predicts that countries with more independent central banks are more likely to de facto peg their exchange rate since independent central banks are more averse to inflation than governments and can de facto peg a country's exchange rate independently of the government.

Key Words

Currencies ; Fear of Floating ; Key Currencies

Links

'Full Text'

In Basket

Export

ID: 108955

When currencies collapse: will we replay the 1930s or the 1970s / Eichengreen, Barry

Eichengreen, Barry	Journal Article
	0 Rating(s) & 0 Review(s)

Publication

2012.

Key Words

China ; Economic Growth ; Currency ; Global Currency ; Currencies ; Currency Collapse

Links

'Full Text'

In Basket

Export

ID: 099070

Will currency follow the flag / Drezner, Daniel W

Drezner, Daniel W	Journal Article
	0 Rating(s) & 0 Review(s)

Publication

2010.

Summary/Abstract

The 2008 financial crisis and its aftermath have triggered uncertainty about the future of the dollar as the world's reserve currency. China and other countries in the Asia-Pacific region have voiced support for a new global monetary regime. There are both economic and geopolitical motivations at the root of these challenges. Going forward, what will the future hold for the international monetary system? Crudely put, will currency follow the flag? This article addresses this question by considering the economic opportunity and geopolitical willingness of actors in the Pacific Rim to shift away from the current international monetary system - with a special emphasis on China as the most powerful actor in the region. While the dollar has shifted from being a top currency to a negotiated one, neither the opportunity nor the willingness to shift away from the dollar is particularly strong. The current window of opportunity for actors in the region to coordinate a shift in the monetary system is small and constrained. The geopolitical willingness to subordinate monetary politics to security concerns is muted.

Key Words

International monetary system ; Financial Crisis ; Currency ; Currencies

Links

'Full Text'

In Basket

Export