G3 Exchange Rate Relationships: A Recap of the Record and a Review of Proposals for Change / Richard H. Clarida.

Format:

Book

Author/Creator:

Clarida, Richard H.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7434.

NBER working paper series no. w7434

Language:

English

Subjects (All):

Foreign exchange rates.

Foreign exchange.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

G3 Exchange Rate Relationships

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Cambridge, Massachusetts : National Bureau of Economic Research, 1999.

Summary:

This paper is a recap of G3 exchange rate relationships since the collapse of Bretton Woods and an analysis of recent proposals for changing the way the G3 countries currently conduct exchange rate policy. We seek to understand these proposals in the context of the status quo monetary policies and intervention arrangements that are likely to be pursued by the G3 central banks in the absence of any formal arrangements among their governments to limit exchange rate volatility. The advocates of the proposals for change have made their assessment of the global costs of exchange rate volatility and (their estimates) of exchange rate misalignments, especially as these apply to the emerging economies through their linkages to the global capital markets. In their view, the status quo is unacceptable, and a sustained effort to limit G3 exchange rate fluctuations would deliver benefits to the world economy that would outweigh the value that they place on any loss of monetary autonomy in the G3 that would be required to maintain such a system. The skeptics make a positive, not a normative, judgment that the sorts of proposals that are on the table will not, in practice, get around the impossible trinity' of international finance.

Notes:

Print version record

December 1999.