Exchange Rate Policy and Interdependence: Perspectives from the Pacific Basin

by Edited by Reuven Glick , Michael Hutchison

• ISBN13: 9780521461108
• ISBN10: 0521461103
• Format: Hardcover
• Copyright: 1994-08-26
• Publisher: Cambridge University Press

Summary

Why countries choose different exchange rate arrangements and how these arrangements affect domestic monetary policy control and macroeconomic stability are questions of substantial interest to policy makers and researchers alike. The countries of the Pacific Basin region offer a wide variety of examples for the comparative study of the implications of different exchange rate arrangements. The essays in this volume examine the degree of financial interdependence and the conduct of exchange rate and monetary policy among Pacific Basin countries. The essays address four broad issues: one, the degree of regional financial market integration in the Pacific Basin, two, the implications of choosing different exchange rate regimes for domestic macroeconomic stability, three, the effect of exchange rate intervention policy on the conduct of domestic monetary policy, and four, the prospects for a yen currency bloc. Some of the essays focus on the national experience of specific countries in the Pacific Basin; others adopt a cross-country comparison approach.

Table of Contents

List of contributors

Preface

Overview

International Financial Market Integration

Financial links around the Pacific Rim: 1982-1992

Relative returns on equities in Pacific Basin countries

Exchange rate policy, international capital mobility and monetary policy instruments

Choice of Exchange Rate Regimes

Exchange rate management: a partial review

Exchange rate policy and insulation from external shocks: the cases of Korea and Taiwan, 1970-1990

Trade price shocks and insulation: Australia's experience with floating rates

The role of the exchange rate in New Zealand monetary policy

Officially floating, implicitly targeted exchange rates: examples from the Pacific Basin

Intervention and Sterilization Policies

Monetary policy, intervention and exchange rates in Japan

The signaling effect of foreign exchange intervention: the case of Japan

Sterilization of the monetary effects of current account surpluses and its consequences: Korea, 1986-1990

Prospects for a Yen Bloc

On the possibility of a yen bloc

Economic fundamentals and a yen currency area for Asian Pacific Rim countries

Index

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