Flexible exchange rates as shock absorbers

Supporters of flexibility, on the other hand, have argued that under floating exchange rates the economy has a greater ability to adjust to external shocks.

In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. We are particularly  Supporters of flexibility, on the other hand, have argued that under floating exchange rates the economy has a greater ability to adjust to external shocks. PDF | In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. We are | Find   Downloadable! In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. 25 Nov 2004 In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. 25 May 2017 To the extent that exchange rate flexibility is a conduit for expenditure-switching effects, it can provide a key shock absorber for small open  2 Apr 2012 5.1 Exchange rate flexibility One question that arises as a the ability of a more flexible exchange rate regime to act as a shock absorber, and 

Flexible exchange rates may not be the most suitable shock absorber for emerging-market economies under pressure, the head of the International Monetary Fund said, adding that a more country

Supporters of flexibility, on the other hand, have argued that under floating exchange rates the economy has a greater ability to adjust to external shocks. PDF | In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. We are | Find   Downloadable! In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. 25 Nov 2004 In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. 25 May 2017 To the extent that exchange rate flexibility is a conduit for expenditure-switching effects, it can provide a key shock absorber for small open  2 Apr 2012 5.1 Exchange rate flexibility One question that arises as a the ability of a more flexible exchange rate regime to act as a shock absorber, and 

Exchange Rate Regimes and Shock Absorbers. 128. Conclusions The debate about fixed or flexible exchange rates began in the early 1950s when Milton 

Flexible Exchange Rates as Shock Absorbers Sebastian Edwards, Eduardo Levy Yeyati. NBER Working Paper No. 9867 Issued in July 2003 NBER Program(s):Economic Fluctuations and Growth Program, International Finance and Macroeconomics Program, International Trade and Investment Program In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative that is the benchmark rate, but the pboc will still inject liquidity or target lending measures, just not on rates, but on the quiddity, but if you commit yourself to stable currency, your hands European Economic Review 49 (2005) 2079–2105 Flexible exchange rates as shock absorbers Sebastian Edwardsa,, Eduardo Levy Yeyatib aNational Bureau of Economic Research, University of California, Los Angeles, USA bUniversidad Torcuato di Tella, Buenos Aires, Argentina Received 25 August 2003; accepted 14 July 2004 Downloadable! In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes. We are particularly interested in investigating whether terms of trade disturbances have a smaller effect on growth in countries with a flexible exchange rate regime, than in countries with a more rigid exchange rate arrangement. flexible exchange rates play a role as shock absorbers, helping countries accommodate real terms of trade shocks, and that this abili ty to accommodate these shocks appears to be particularly "Flexible Exchange Rates as Shock Absorbers," NBER Working Papers 9867, National Bureau of Economic Research, Inc. Sebastian Edwards & Eduardo Levy Yeyati, 2004. " Flexible Exchange Rates as Shock Absorbers ," Business School Working Papers exchangerates, Universidad Torcuato Di Tella. As well, attempts to use a flexible exchange rate as a short-term shock absorber is unlikely to be very effective in offsetting short-term trade disturbances such as a substantial dip-down in exports associated with a global economic recession. 5.4 Greater exchange rate flexibility: options and resistance

25 Nov 2004 In this paper we analyze empirically the effect of terms of trade shocks on economic performance under alternative exchange rate regimes.

welfare gains from a stable exchange rate are compared with the benefits of ex- change rate flexibility as a shock absorber. For instance, more open countries  A vast range of empirical literature classifies exchange rate regimes as either de rate against the benefits of exchange rate flexibility as a shock absorber in the   A depreciation of sterling would occur inside a free-floating currency system and has A weaker currency can act as a useful shock absorber when a country  26 Jul 2007 duration of fixed exchange rate spells and floating exchange rate spells, Levy- Yeyati, 2005, “Flexible Exchange Rates as Shock Absorbers,”.

hence, δ < 0.3 The effect of a labour supply shock on the real exchange rate is more difficult to establish. A flexible price exchange rate model would typically.

For the nominal exchange rate to be an effective shock absorber—under either an adjustable or a flexible exchange rate regime—a depreciation of the nominal  

exchange rates are effective shock absorbers when faced with adverse real shocks. adverse oil price shock under fixed and flexible exchange rate regimes .