1 option
What Makes a Currency Procyclical? : An Empirical Investigation / Cordella, Tito
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Cordella, Tito
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Countercyclical Currencies.
- Currency Cyclicality.
- Exchange Rate.
- Fear Of Floating.
- Foreign Asset Position.
- Monetary Policy.
- Procyclical Currencies.
- Trilemma.
- Local Subjects:
- Countercyclical Currencies.
- Currency Cyclicality.
- Exchange Rate.
- Fear Of Floating.
- Foreign Asset Position.
- Monetary Policy.
- Procyclical Currencies.
- Trilemma.
- Physical Description:
- 1 online resource (32 pages)
- Other Title:
- What Makes a Currency Procyclical?
- Place of Publication:
- Washington, D.C., The World Bank, 2014
- System Details:
- data file
- Summary:
- This paper looks at the correlation between the cyclical components of gross domestic product and the exchange rate and classifies countries' currencies as procyclical if they appreciate in good times, countercyclical if they appreciate in bad times, and acyclical otherwise. With this classification, the paper shows that: (i) the countries that are commodity exporters and experience procyclical capital flows tend to have procyclical currencies; (ii) countries with procyclical currencies tend to restrict their capital accounts, perhaps as an attempt to reduce the degree of procyclicality; (iii) countries with procyclical currencies pursue procyclical monetary policy; (iv) however, in the last decade, there is a disconnect between the cyclicality of currency and monetary policy; and (v) the disconnect may reflect a decline in the fear of floating, which can be partially attributed to an improvement in countries' net foreign asset positions.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.