Exchange rate regime and central bank independence in a small volatile economy: the case of Iceland

1994 ◽  
pp. 129-143
Author(s):  
M. Gudmundsson
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Exchange Rate Regime ◽  
Central Bank Independence

scholarly journals The Political Economy of Monetary Institutions

2002 ◽  
Vol 56 (4) ◽  
pp. 693-723 ◽  
Author(s):  
William Bernhard ◽  
J. Lawrence Broz ◽  
William Roberts Clark
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Open Economy ◽  
Political Institutions ◽  
Exchange Rate Regime ◽  
Central Bank Independence ◽  
Time Inconsistency ◽  
Party Competition ◽  
Policy Objectives ◽  
Exchange Rate Arrangements

In recent decades, countries have experimented with a variety of monetary institutions, including alternative exchange-rate arrangements and different levels of central bank independence. Political economists have analyzed the choice of these institutions, emphasizing their role in resolving both the time-inconsistency problem and dilemmas created by an open economy. This “first-generation” work, however, suffers from a central limitation: it studies exchange-rate regimes and central bank institutions in isolation from one another without investigating how one monetary institution affects the costs and benefits of the other. By contrast, the contributors to this volume analyze the choice of exchange-rate regime and central bank independence together and, in so doing, present a “second generation” of research on the determinants of monetary institutions. The articles incorporate both economic and political factors in explaining the choice of monetary institutions, investigating how political institutions, democratic processes, political party competition, and interest group pressures affect the balance between economic and distributional policy objectives.

scholarly journals Rulers of the game: central bank independence during the interwar years

1996 ◽  
Vol 50 (3) ◽  
pp. 407-443 ◽  
Author(s):  
Beth A. Simmons
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Exchange Rate Regime ◽  
Central Banks ◽  
Central Bank Independence ◽  
Price Stability ◽  
Left Wing ◽  
Domestic Price ◽  
External Adjustment ◽  
Fixed Exchange Rate

Central bank independence is associated with restrictive monetary choices that can be deflationary within fixed exchange-rate regimes. Because central banks act to counteract domestic inflation, they put a premium on domestic price stability at the expense of international monetary stability. Evidence from fifteen countries between 1925 and 1938 shows that the more independent central banks took more deflationary policies than were necessary for external adjustment. Central banks in general were more restrictive under left-wing governments than they were under more conservative regimes and often were more restrictive than required for external equilibration. This suggests that policies of independent central banks designed to enhance domestic price stability may force deflationary pressures onto other states in the system and potentially destabilize a fixed exchange-rate regime.

scholarly journals Monetary Policy Analysis in Serbia

2015 ◽  
Vol 4 (3) ◽  
pp. 147-180 ◽  
Author(s):  
Vesna Martin
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Central Bank ◽  
Inflation Targeting ◽  
Exchange Rate Regime ◽  
Policy Instruments ◽  
Exchange Rate Policy ◽  
Floating Exchange Rate ◽  
National Bank ◽  
Main Regulator

Abstract The paper focuses on analysing monetary policy in Serbia. The National Bank of Serbia chose inflation targeting, which sets price stability as the main objective of monetary policy. To achieve this goal, the central bank uses different monetary policy instruments which analysis can provide us with the understanding of the main directions of their actions but also of the limitations of its application. Only through improvement of both instruments and monetary policy the central bank will create a better foundation for achieving monetary stability. In addition, the implementation of exchange rate policy is entrusted to the National Bank of Serbia, as the main regulator of the financial system. A mere use of managed floating exchange rate, as the chosen exchange rate regime, is an appropriate solution in the current economic circumstances and in accordance with the desired objective of monetary policy.

Brazilian Inflation from 1980 to 1993: Causes, Consequences and Dynamics

1996 ◽  
Vol 28 (3) ◽  
pp. 635-666 ◽  
Author(s):  
G. Tullio ◽  
M. Ronci
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Central Bank Independence ◽  
Budget Deficits ◽  
The Government ◽  
Exchange Rate Shocks

AbstractThis article focuses on Brazilian inflation: its causes, consequences and dynamics from 1980 to 1993. We argue that the main economic cause of the Brazilian inflation was the excessive growth of money, in turn caused by too high budget deficits. Oil and exchange rate shocks also played a role, together with the greater dependence of the Central Bank of Brazil on the government. We measure the degree of Central Bank independence by the variable ‘turnover’ of Central Bank governors defined as the number of months in office. The effect of this variable on inflation is found to be highly significant and positive.

scholarly journals Remodelling Macroeconomic Trilemma and Central Bank Behaviour in Nigeria: A Markov-Switching Approach

2020 ◽  
Author(s):  
Taofeek Olusola AYINDE ◽  
BANKOLE Abiodun S.
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Structural Breaks ◽  
Exchange Rate Regime ◽  
Markov Switching ◽  
Unit Root Test ◽  
Monetary Authority ◽  
Policy Variable ◽  
Bank Behavior ◽  
The Exchange Rate

Abstract This study investigates macroeconomic trilemma and Central Bank behavior in Nigeria. The period of investigation spans the quarterly period of 1981–2017. Upon the data stability condition of Zivot-Andrew unit-root test with structural breaks, the Markov Switching Dynamic Regression was employed as the technique of analysis. With a validated trilemma hypothesis, the study found that the trilemma constraints hold for the Nigerian economy but at the expense of the autonomy of the monetary authority. Being the policy variable of the Central Bank of Nigeria, the exchange rate was found to follow two regimes of fixed and managed-float regimes. The results also showed that political risk was found insensitive to the regimes of exchange rate while the foreign sector was considered as a moderating factor for the behavior of the monetary authority; irrespective of the exchange rate regime.JEL Classifications: F41, E32, E52, C22, E58.

Lower naira will not offset Nigerian recession risks

2020 ◽  
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Exchange Rate Regime ◽  
Capital Controls ◽  
Oil Price ◽  
Content Type ◽  
Official Exchange Rate ◽  
Multiple Exchange ◽  
Price War ◽  
The Exchange Rate

Subject Pressured naira. Significance The naira has depreciated by approximately 11% on the parallel market since the Saudi-Russia oil price war began, which dashed hopes of OPEC+ supply curbs to stem the price rout amid the escalating COVID-19 pandemic. This has hampered the Central Bank of Nigeria’s (CBN) ability to support the multiple exchange rate regime, prompting a sharp devaluation of the official exchange rate. Impacts The naira’s devaluation will accelerate rising inflationary pressures from the closure of Nigeria’s land borders last year. The CBN could impose damaging capital controls once more if the exchange rate falls further towards 500:1. With low funds in the oil savings fund, the authorities will likely limit their intervention against COVID-19 to soft loans from the CBN.

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