港大英文课件Exchangerateregimes.ppt

“No single currency regime is right for all currencies or at all time” by Jeffrey A. Frankel 17 April 2000 Maggie Leung and Ka-fu Wong Jeffrey A. Frankel James W. Harpel Professor of Capital Formation and Growth Kennedy School of Government Harvard University /people/jeffrey_frankel Outline: Introduction Balancing the advantages of Fixed and Flexible Exchange Regime No single currency regime is right for all countries Corner solution are right for some countries No single currency regime is right for all time The optimal currency area criterion evolves over time Summary I. Introduction Fixed, flexible and intermediate exchange rate regime Lament from the East Asian Crisis (intermediate exchange rate regimes are weak) Vanishing Intermediate Regime Frankel objects this idea of vanishing intermediate regime because No single currency regime is right for all countries No single currency regime is best for all time II. Balancing the Advantage of Fixed and Flexible Exchange Rates A. Intermediate Regime Trade off Government would like to capture the advantage of fixed and flexible exchange rate simultaneously by balancing the tradeoff between fixed and flexible exchange rate regimes. Flexibility: there is a continuum of Exchange Rate Regimes Currency Union Currency Board Truly Fixed Exchange Rate Adjustable peg Crawling peg Basket peg Target Zone or board Managed Float Free Float Increasing Flexibility Exchange rate regimes Currency Union the currency that circulates domestically is literally the same as that circulating in one or more major neighbors or partners Currency Board the issuance of currency is fully backed by foreign assets Truly Fixed Exchange Rate Exchange rate regimes Adjustable peg Fixed but adjustable. Most countries that declare their rates fixed actually undertake periodic realignments or change regimes altogether Crawling peg The peg can be regularly reset in a series of mini-devaluations Exchange rate regimes Basket peg The e