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World of Capital Mobility MARTIN WOLF By ABSTRACT: All rate create difficulties. exchange regimes But, pain- has now reinforced the theoretical ful experience presumption in a world of account against ...
This paper discusses the choice of exchange ‐ rate regime. It is argued that in general floating is undesirable, because of the extreme weakness of the economic mechanism that holds the exchange rate ...
of an open economy’s financial system. A flexible exchange rate allows an optimizing central bank to chart an independent course but does not insulate the domestic financial sector or broader economy from ...
How do exchange rate regimes influence fiscal discipline? This important question has typically been addressed exploiting the classic dichotomy of fixed versus flexible exchange rate regimes assuming ...
of Bretton Woods. This approach is found to be problematic. A more powerful explanation is the postwar rise in capital mobility , which produces a trade-off between exchange rate stability and policy autonomy ...
arise in a world with endogenous fiscal policy. I show that this correlation does not depend on capital mobility and therefore is compatible with any degree of capital mobility . This implies ...
such regimes until they were swept away in crises. This spawned the bipolar view, which asserts that in a world of capital mobility , countries have to choose between firmly fixed and freely floating rates ...
framework with imperfect capital mobility . Firms' demands for working capital are financed by bank credit. The shock leads to a rise in domestic interest rates , capital outflows and a drop in official ...
exchange rates in a world of perfect capital mobility . His frame of reference is a Mundell-Fleming model but inelastic expectations about the exchange rate are introduced into the analysis. One conclusion ...
In a world of high capital mobility , several risks are emerging in the financial markets and the Central Bank intervention has played an important role in managing these risks. In India, the Reserve ...
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