Examining China: Monetary Policy, Inflation Potential, and the Organization of the Monetary System Under a Floating Exchange Rate System

2018 ◽  
pp. 397-399
Author(s):  
Victor A. Canto ◽  
Andy Wiese
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Rate System ◽  
Monetary System ◽  
Floating Exchange Rate ◽  
Exchange Rate System

scholarly journals Debt, Growth, and Poverty in the International Monetary System (The Quaid-i-Azam Memorial Lecture)

2001 ◽  
Vol 40 (4I) ◽  
pp. 283-314
Author(s):  
Robert A. Mundell
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
International Monetary System ◽  
Memorial Lecture ◽  
Rate System ◽  
Currency Area ◽  
Monetary System ◽  
Fixed Exchange Rate ◽  
Floating Exchange Rate ◽  
Exchange Rate System

This paper explores the relationship between debt, growth, and poverty and the international monetary system. With a well-functioning international monetary system, economic policy works well, instruments are assigned to targets appropriately, and discipline is maintained. The fixed exchange rate is contrasted with alternative monetary rules. The monetary rule is the weakest system; monetary targeting has failed in every country in which it has been tried. An advantage of the fixed exchange rate is the clue it provides to the price level, interest rate, and future monetary policy. Other things being equal, the use of a currencies basket is inferior to a single currency peg, while a freely floating exchange rate system puts itself at the mercy of speculators. The paper points out the conditions for a successful currency area as a consensus on a common inflation rate; a common basket of goods with which to measure inflation; exchange rate that must be locked; member countries must adopt a common monetary policy; and a formula must be devised for distributing and using the seigniorage profits from monetary expansion. There is a need to study the possibility of an Asian currency area and the links between the APEC and the SAARC. Regular and mutual surveillance on monetary, fiscal, and exchange rate convergence, and policies that minimise exchange rate uncertainty and work towards a currency club area based on a common anchor— initially the dollar—are needed. Setting up of an Asian Monetary Fund is also suggested, one that is closely modelled on the original IMF articles of agreement and will provide an anchored fixed exchange rate system.

scholarly journals The Swiss National Bank’s fear of float

2019 ◽  
Vol 8 (2) ◽  
pp. 51-64
Author(s):  
Kristin Berthold ◽  
Georg Stadtmann
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rates ◽  
Open Economy ◽  
Small Open Economy ◽  
Rate System ◽  
Floating Exchange Rate ◽  
Exchange Rate System ◽  
Relative Ppp ◽  
The Empirical Analysis

Abstract We theoretically examine under which assumptions the impossible trinity holds. We also focus on the most recent Swiss experience and ask whether the SNB gained monetary independence by switching from a fixed to a floating exchange rate system in January 2015. The theoretical examination shows that the impossible trinity holds under the following assumptions: Equality of domestic and foreign real interest rates, the quantity theory of money holds, and that the relative PPP is fulfilled. The empirical analysis reveals that relative PPP does not hold for the Swiss case and it was necessary for the SNB to adopt its monetary policy in accordance with the ECB’s expansionary monetary policy. We show that for a small open economy, such as Switzerland, whether the central bank implements a fixed or a floating exchange rate system does not play a role in its monetary policy independence.

scholarly journals KEMBALI KE SISTIM KURS TETAP (FIXED EXCHANGE RATE)?

2007 ◽  
Vol 3 (1) ◽  
pp. 37
Author(s):  
Edy Rahmantyo Tarsilohadi
Keyword(s):  
Exchange Rate ◽  
Economic Condition ◽  
Flexible Exchange Rate ◽  
Rate System ◽  
Monetary System ◽  
Fixed Exchange Rate ◽  
Exchange Rate System ◽  
The Right

Indonesia do want make the right Exchange Rate System, with be back to the Fixed Exchange Rate. In this paper, because of the economic condition and the environment monetary system, so the best system is still the Flexible Exchange Rate.

Exchange Rate and Industry-Level Energy Import

2021 ◽  
pp. 71-86
Author(s):  
Abdul Sahib ◽  
Sergey Prosekov
Keyword(s):  
Exchange Rate ◽  
Supply And Demand ◽  
Exchange Rate Volatility ◽  
Trade Flows ◽  
Level Energy ◽  
Rate System ◽  
Domestic Prices ◽  
Floating Exchange Rate ◽  
Exchange Rate System ◽  
The Impact

After the Bretton Woods exchange rate system in 1973, the free-floating exchange rate, the rate determined by the forces of supply and demand, began, which developed an interest in the area of many researchers to investigate, theoretically and empirically, the impact of exchange rate volatility on the world trade flows. There are two channels, direct and indirect, through which the change in exchange rate affects domestic prices. Under the direct channel, a fall in exchange rate leads to increase in imports as well as increases the prices of inputs in domestic currency. Secondly, under the indirect channel, a decline in the exchange rate triggers the availability of domestic goods to foreign buyers at a cheaper rate, and the demand for domestic products increased. Thus, the change in exchange rate affects trade flows either positively or negatively.

CHINA’S EXCHANGE RATE SYSTEM REFORM: TWO POTENTIAL MISTAKES AND THE RECOMMENDED LONG-TERM SYSTEM

2016 ◽  
Vol 61 (02) ◽  
pp. 1640025
Author(s):  
PAUL S. L. YIP
Keyword(s):  
Exchange Rate ◽  
Capital Mobility ◽  
Exchange Rate Policy ◽  
Chinese Economy ◽  
System Reform ◽  
Rate System ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
Exchange Rate System

Further to the author’s recommended transitory and medium-term exchange rate system reforms that was implemented in China since July 2005, this paper explains that: (1) a long-term reform towards a floating exchange rate system with free capital mobility will cause huge damages to the Chinese economy. It then proposes a long-term exchange rate system that would probably benefit China the most; and (2) there is a serious mistake in China’s latest exchange rate policy: The Chinese central bank has mistakenly allowed the renminbi exchange rate to rise with the strong rebound of the US dollar. This will cause not only a substantial drag in China’s export and GDP growth, but will also eventually make China’s financial and economic system vulnerable to a highly disruptive correction in the renminbi exchange rate.

MANAGING EXCHANGE RATE VOLATILITY: A COMPARATIVE COUNTERFACTUAL ANALYSIS OF SINGAPORE, 1994–2003

2009 ◽  
Vol 54 (04) ◽  
pp. 543-568 ◽  
Author(s):  
PETER WILSON ◽  
HENRY SHANG REN NG
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Regime ◽  
East Asian ◽  
Exchange Rate Volatility ◽  
Rate System ◽  
The Us ◽  
Floating Exchange Rate ◽  
Effective Exchange ◽  
Exchange Rate System ◽  
Effective Exchange Rate

This paper looks at how Singapore's exchange rate regime has coped with exchange rate volatility, by comparing the performance of Singapore's actual regime in minimizing the volatility of the nominal effective exchange rate (NEER) and the bilateral rate against the US dollar with some counterfactual regimes and the corresponding performance of eight other East Asian countries. In contrast to previous counterfactual exercises, we apply a more disaggregated methodology for the trade weights, a larger number of trade partners and ARCH/GARCH techniques to capture the time-varying characteristics of volatility. Our findings confirm that Singapore's managed floating exchange rate system has delivered relatively low currency volatility. Although there are gains in volatility reduction for all countries in the sample from the adoption of either a unilateral or a common basket peg, particularly post-Asian crisis, these gains are relatively low for Singapore, largely because of low actual volatility. There are additional gains for non-dollar peggers from stabilizing intra-east Asian exchange rates against the dollar if they were to adopt a basket peg, especially post-crisis, but the gains for Singapore are again relatively modest. Finally, the conclusion from previous counterfactual studies that there is little difference between a unilateral basket peg and a common basket peg in terms of stability reduction is confirmed.

FINANCING RESOURCE DEVELOPMENT AFTER CAMPBELL

1982 ◽  
Vol 22 (1) ◽  
pp. 153
Author(s):  
G. A. Gloster
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Financial Markets ◽  
Interest Rates ◽  
Resource Development ◽  
Bank Lending ◽  
Access To Finance ◽  
Rate System ◽  
Financial Activity ◽  
Exchange Rate System

The paper deals briefly with the basic nature of financial activity and markets and of the intermediaries, including banks, within these markets. It is argued that efforts by the authorities to affect monetary policy through controls on bank lending (quantitative and interest rates) are inefficient and only lead to circumvention. To the degree that prices (interest rates) are kept down in one area, they will be higher in another, and supply of credit reduced from one source will encourage a greater supply from another. The Campbell Committee's recommendations, if implemented, are likely to result in freer financial markets and to improve the resource development sector's access to finance. Clear examples would be the removal of foreign exchange restrictions and the setting up of a market-oriented exchange rate system. However, in one sense this access may be narrowed as the extension of bank-type prudential controls to bank subsidiaries and to all 'deposit-taking institutions' may impede the free functioning of financial markets as well as further entrenching the 'safeguarded deposit' concept over the community's savings.

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