PPT-A State-Centered Approach to Monetary and Exchange-Rate Pol

International Political Economy Prof Tyson Roberts 1 Goals Macroeconomic Trilemma Review Statecentered approach to macroeconomic policy Central Bank Independence Argentina case the beginning. Two polar cases. Fixed (pegged) exchange rates. CB buys or sells reserves to maintain a set price of foreign exchange. Flexible exchange rates. CB does not intervene in market for foreign exchange. and . Monetary System. Relationship between monetary system and foreign exchange rates. Historical development. Fixed vs floating exchange rates. Role of the IMF and World Bank. Implications for managers. International Monetary System. Thoughts on sources of technological change. Real business cycles: A sketch. Open economy macroeconomics. International financial system. Short-run open-economy output determination (Mundell -Fleming model). Monetary System. Relationship between monetary system and foreign exchange rates. Historical development. Fixed vs floating exchange rates. Role of the IMF and World Bank. Implications for managers. International Monetary System. Oldřich Dědek. Institute of Economic Studies, Charles University. 2. Major themes in cost-benefit debate. Absorption of asymmetric shocks. Restoration of external price competitiveness. Autonomous monetary policy in face of growing capital mobility. International . Political Economy. Prof. Tyson Roberts. Balance of Payments (. BoP. ). Current account. Current account balance =. Current receipts – Current Expenditures. Current includes . Goods & services. OF EXCHANGE RATES. LECTURE 23 --. . . Building blocs. - Interest rate parity. - Money demand equation. - Goods markets. . Flexible-price . version: . monetarist/Lucas model. - . derivation. - applications: hyperinflation; speculative . . Some Unanswered Questions. Rashad . Cassim. Economic Research and Statistics . Stellenbosch University. 27/02/2017. Objectives of Presentation. T. o share with you some of the analytical and empirical difficulties we experience in making sense of the current . Sections. Exchange rate arrangements. Balance of payments. Exchange rate regime, before 1976. Desired exchange rate stability.. Currencies were largely anchored, either directly or indirectly, on gold.. Fixed vs. Floating. The exchange rate fluctuates in a narrow range (or not at all) against a base currency over a sustained period of time. . Government action is needed to maintain the exchange rate.. in International . Finance. Preview. Goals of macroeconomic policies. Gold standard. Interwar years. Bretton Woods system. Collapse of the Bretton Woods system. Macroeconomic Goals. Macroeconomic. . Paul De Grauwe. The . fragility of incomplete monetary unions. Introduction. Summing up from previous lectures:. Complete monetary union. : a monetary union together with budgetary union.. Incomplete monetary union. the Mundell-Fleming model. Case 1. Flexible exchange rate regime. Monetary policy effectiveness. (Changes in money supply). An increase in money supply (M/P=l. 1. Y-l. 2. i eq.1.6) reduces the local interest rate and increases investments and output (eq. 1.1 and 1.3). Since the model represents an open economy, the local interest rate is now lower than the global interest rate. The UIP is no longer verified (. Panel . on Monetary Policy,. Conference . on Monetary Policy. and Financial Stability in . Emerging . Markets,. NBER & Central Bank of the Republic . of . Turkey,. Istanbul, Turkey, June 13-14, 2014.