Bretton Woods Fixed Exchange Rate System versus Floating Exchange Rate System
ABSTRACT One of the most important issues of monetary policy is to find out whether the state should intervene among the exchange rates, taking into account the fact that changes in the exchange rates represent a significant transmission channel of the effects generated by the monetary policy. Taking into consideration the failure of fixed exchange rate regimes and the recent improvement of financial markets, the return in the near future to such a regime – as for example the Bretton Woods system – is probably almost impossible.
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ABSTRACT: We present a two-country, heterogeneous-agent model in which changes in a country's monetary policy affect real interest rates, relative prices of traded and nontraded goods, and real exchange rates. Nontransitory real effects of monetary policy stem from legal restrictions in the form of country-specific reserve requirements. Without violating the classical assumptions of individual rationality and flexible prices, the model's implications seem qualitatively consistent with the U.S. experience of the 1980s: a monetary policy tightening leading to a rise in the real interest rate and to an initial rise in the real value of the dollar which is subsequently reversed.Journal of Economic Dynamics and Control 01/1995; DOI:10.1016/0165-1889(93)00777-2 · 0.86 Impact Factor
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ABSTRACT: The asymptotic distributions of cointegration tests are approximated using the Gamma distribution. The tests considered are for the I(1), the conditional I(1), as well as the I(2) model. Formulae for the parameters of the Gamma distributions are derived from response surfaces. The resulting approximation is flexible, easy to implement and more accurate than the standard tables previously published.