Sustaining Fixed Exchange Rates: A Model with Debt and Institutions
Electronic Access:
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Summary:
Fixed exchange rate regimes have come into disrepute, as their defense has become all but impossible. Yet, while a determined attack on a currency cannot be prevented or, ultimately, withstood, policies can reduce the vulnerability of a country to such attacks. The paper develops an analytical framework of costs and benefits of a fixed exchange rate, based on the ability of a developing country to meet its external obligations while achieving a maximum rate of long-term output growth. The focus is on how structural policies and institutions influence the degree of dependence of a country on a fixed exchange rate regime.
Series:
Working Paper No. 2001/027
Subject:
Balance of payments Conventional peg Economic sectors Exchange rates Financial sector Foreign direct investment Foreign exchange National accounts Return on investment
English
Publication Date:
March 1, 2001
ISBN/ISSN:
9781451844528/1018-5941
Stock No:
WPIEA0272001
Pages:
23
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