Global Transmission of Interest Rates: Monetary Independence and Currency Regime / Jeffrey A. Frankel, Sergio L. Schmukler, Luis Serven.

Format:

Book

Author/Creator:

Frankel, Jeffrey A.

Contributor:

National Bureau of Economic Research.

Schmukler, Sergio L.

Serven, Luis.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8828.

NBER working paper series no. w8828

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Global Transmission of Interest Rates

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2002.

Summary:

Using a large sample of developing and industrialized economies during 1970-1999, this paper explores whether the choice of exchange rate regime affects the sensitivity of local interest rates to international interest rates. In most cases, we cannot reject full transmission of international interest rates in the long run, even for countries with floating regimes. Only large industrial countries can benefit, or choose to benefit, from independent monetary policy. However, short-run effects differ across regimes. Dynamic estimates show that interest rates of countries with more flexible regimes adjust more slowly to changes in international rates.

Notes:

Print version record

March 2002.