Monetary Policy Under Dual Exchange Rates / Robert E. Cumby.

Format:

Book

Author/Creator:

Cumby, Robert E.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1424.

NBER working paper series no. w1424

Language:

English

Subjects (All):

Foreign exchange--Mathematical models.

Foreign exchange.

Monetary policy--Mathematical models.

Monetary policy.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1984.

Cambridge : National Bureau of Economic Research, 1984.

Summary:

This paper finds that the introduction of dual exchange rates gives the monetary authority greater independence from external constraints than it would otherwise enjoy. The monetary authority is able to influence the level of aggregate demand in the short run and to sterilize the effects of temporary foreign distrubances. In addition, the paper finds that dual rates insulate the domestic economy fully from foreign interest rate changes but do not provide insulation from speculative disturbances.

Notes:

Print version record

August 1984.