Exchange-Rate Policies for Emerging Market Economies

by Sweeney, Richard J.; Wihlborg, Clas; Willett, Thomas D.; Willett, Thomas D.

• ISBN13: 9780813330198
• ISBN10: 081333019X
• Format: Hardcover
• Copyright: 1998-10-01
• Publisher: Westview Pr

Summary

With the collapse of the former Soviet Union, many countries were faced with the need to establish national currencies. A number of additional formerly communist countries were forced to fundamentally adjust their monetray policies to deal with the transition to market-oriented economies. The process of liberalization in dozens of developing countrys left their governments faced with similar, if lesser, challenges. International financial crises in Bulgaria, the Czech Republic and Russia in Europe, Argentina and Mexico in Latin America, and Indonesia, Malaysia, the Philippines and Thailand in Asia have made front-page news in the last several years. These crises vividly illustrate the costs of inconsistencies between the domestic and international aspects of national financial policies.This volume deals with the most important international aspect of these challenges to national monetray policies in emerging market economiesthe choice of exchange rate regime. A distinguished group of Western economists and Central European economists and officials review the recent experiences and the former communist and many developing countries and discuss the major lessons to be drawn.

Author Biography

Christine P. Ries is professor of economics and chair of the School of Economics, Ivan Allen College, Georgia Institute of Technology. Richard J. Sweeney is Sullivan/Dean Professor of International Finance at Georgetown School of Business, Georgetown University. Richard J. Sweeney is the Sullivan/Dean Professor of International Finance at Georgetown University; Clas Wihlborg is professor of economics at the University of Gothenburg in Sweden; and Thomas D. Willett is professor of economics at the Lowe Institute of Political Economy at Claremont McKenna College. Richard J. Sweeney is Sullivan/Dean Professor of International Finance at Georgetown University, Edward Tower is professor of economics at Duke University, and Thomas D. Willett is Horton Professor of Economics at Claremont McKenna College and the Claremont Graduate School.

Table of Contents

Acknowledgments	p. ix
Introduction	p. 1
Conclusion	p. 17
Notes	p. 17
References	p. 18
Fixed Vs Flexible Exchange Rates: the Debate Continues	p. 21
The Case for Hard Currency Strategies for Emerging Market Economies	p. 23
Introduction	p. 23
Summary and Conclusions	p. 35
Appendix Selective Policy Indicators	p. 36
Notes	p. 38
References	p. 41
Is Optimum Currency Area Theory Irrelevant for Economies in Transition?	p. 45
Concluding Remarks	p. 57
Notes	p. 58
References	p. 59
The Relevance of the Optimum Currency Area Approach for Exchange Rate Policies in Emerging Market Economies	p. 61
Concluding Remarks	p. 71
Notes	p. 73
References	p. 75
Exchange Rate Pegging as an Anti-Inflation Strategy	p. 81
Exchange Rates as Nominal Anchors: An Overview of the Issues	p. 83
Introduction	p. 83
Concluding Remarks	p. 98
Notes	p. 100
References	p. 104
Central European Exchange Rate Policy and Inflation	p. 113
Concluding Comments	p. 122
Notes	p. 124
References	p. 125
The Baltic States: Alternative Routes to Credibility	p. 127
Conclusions	p. 138
References	p. 139
Notes	p. 139
Exchange Rate Based Stabilization Policy in Latin America	p. 141
Summarizing the Lessons from Latin America	p. 155
Concluding Remarks	p. 156
Notes	p. 157
References	p. 159
Is Pegging the Exchange Rate a Cure for Inflation? East Asian Experiences	p. 165
Conclusions	p. 188
Appendix Exchange Rate Regimes in Pacific Basin Economies, 1980-1994	p. 188
Notes	p. 190
References	p. 191
Issues for Exchange Rate Management	p. 193
Intervention Strategy and Purchasing Power Parity	p. 195
Introduction	p. 195
Notes	p. 221
References	p. 222
Trade and Payments in Eastern European Economic Reform	p. 227
Concluding Remarks	p. 236
References	p. 237
Notes	p. 237
Real Exchange Rate Targeting in Economies in Transition and the Sterilization Problem: The Hungarian Experience	p. 239
Conclusions	p. 254
Appendix	p. 255
Notes	p. 256
References	p. 260
Currency Areas and Currency Boards	p. 263
Introduction	p. 265
Exchange Rate Crises: Are Currency Boards the Answer for Emerging Market Economies?	p. 265
Conclusions	p. 279
Notes	p. 280
References	p. 284
The Estonian Currency Board	p. 287
Conclusions	p. 293
Notes	p. 293
The Lithuanian Currency Board	p. 295
Introduction of the Lithuanian Currency Board	p. 296
Conclusions	p. 301
Appendix Law of the Republic of Lithuania No. 1-407 on the Credibility of the Litas March 17, 1994, Vilnius	p. 302
Notes	p. 304
References	p. 305
Experiences from the Emerging Market Economies	p. 307
The Czech Case: Fixed Exchange Rates Through Stages of Transition	p. 309
The Czech Case: Fixed Exchange Rates Through Stages of Transition	p. 309
Conclusions: is an Exchange Rate Peg Sustainable and Desirable in an Economy in Transition?	p. 326
Notes	p. 329
References	p. 330
Exchange Rate Policy in Hungary Between 1989 and Mid 1995	p. 333
Conclusions	p. 347
Notes	p. 348
Poland's Exchange Rate Policy in the 1990s	p. 351
Conclusions	p. 369
Notes	p. 370
References	p. 373
An Evaluation of Optimal Currency Areas for the Commonwealth of Independent States	p. 375
Notes	p. 386
Notes	p. 388
References	p. 389
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