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On The Exchange Rate System: Historical Development, Theoretical Analysis And Empirical Research

Posted on:2003-04-29Degree:DoctorType:Dissertation
Country:ChinaCandidate:D H LinFull Text:PDF
GTID:1116360092470975Subject:History of Economic Thought
Abstract/Summary:PDF Full Text Request
What determines the choice of exchange rate regime? The basic framework should be considered under the so call "Mundell Triangle Law",which means one economy is impossible to reach at the same time the following target:the exchange rate stability,free capital mobility and policy independency. The world economy during the 1990s witnessed the increasing capital mobility,this changing environment generally called on more flexible exchange rate arrangement,or alternatively,super fixed exchange rate regime such as monetary union,currency board or dollarization. The current exchange rate arrangement among Yen,Dollar and Euro fully meets the requirement for the free capital mobility,while the pursue for more national policy independency thus less policy coordination leads to the great disorder in exchange market. Yet in Europe,the consideration for inner exchange rate stability made the euro area developed into a monetary union,although it means that the member countries will lose their monetary independency in some extend,such cost in the long run will be exceeded by the benefit brought by EMU. Some developing countries1 suffering from speculative attacks suggest it's difficult to sustain medium exchange rate regime under high capital mobility,For some large countries such as Mexico or China,managed floating may be feasible choice,and for some other small economies,they may willing to surrender their monetary independency by adopting super fixed arrangement such as dollarization.
Keywords/Search Tags:Exchange rate regime, EMU, Capital Mobility
PDF Full Text Request
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