Bad Dreams Under Alternative Anchors: Are the Consequences Different?
Using a simple model, this paper shows how a strict monetary rule exhibits characteristics similar to those of an exchange rate anchor, in terms of a lack of robustness in the presence of adverse expectations ("bad dreams"). More specifically, as an anticipated devaluation under an exchang...
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Format: | Elektronisch E-Book |
Sprache: | English |
Veröffentlicht: |
Washington, D.C
International Monetary Fund
2000
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Schriftenreihe: | IMF Working Papers
Working Paper No. 00/20 |
Online-Zugang: | UBW01 UEI01 LCO01 SBR01 UER01 SBG01 UBG01 FAN01 UBT01 FKE01 UBY01 UBA01 FLA01 UBM01 UPA01 UBR01 FHA01 FNU01 BSB01 TUM01 Volltext |
Zusammenfassung: | Using a simple model, this paper shows how a strict monetary rule exhibits characteristics similar to those of an exchange rate anchor, in terms of a lack of robustness in the presence of adverse expectations ("bad dreams"). More specifically, as an anticipated devaluation under an exchange rate rule leads to well-known contractionary effects, an anticipated increase in the money stock under a monetary rule, though initially expansionary, becomes contractionary when these expectations are not validated. This suggests that much of the criticism of an exchange rate anchor implicitly considers not another rule but rather, discretion as the alternative |
Beschreibung: | 1 Online-Ressource (23 p) |
ISBN: | 1451843836 9781451843835 |
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spelling | Auernheimer, Leonardo Verfasser aut Bad Dreams Under Alternative Anchors Are the Consequences Different? Auernheimer, Leonardo Washington, D.C International Monetary Fund 2000 1 Online-Ressource (23 p) txt rdacontent c rdamedia cr rdacarrier IMF Working Papers Working Paper No. 00/20 Using a simple model, this paper shows how a strict monetary rule exhibits characteristics similar to those of an exchange rate anchor, in terms of a lack of robustness in the presence of adverse expectations ("bad dreams"). More specifically, as an anticipated devaluation under an exchange rate rule leads to well-known contractionary effects, an anticipated increase in the money stock under a monetary rule, though initially expansionary, becomes contractionary when these expectations are not validated. This suggests that much of the criticism of an exchange rate anchor implicitly considers not another rule but rather, discretion as the alternative Online-Ausg George, Susan Mary Sonstige oth http://elibrary.imf.org/view/IMF001/00535-9781451843835/00535-9781451843835/00535-9781451843835.xml Verlag URL des Erstveröffentlichers Volltext |
spellingShingle | Auernheimer, Leonardo Bad Dreams Under Alternative Anchors Are the Consequences Different? |
title | Bad Dreams Under Alternative Anchors Are the Consequences Different? |
title_auth | Bad Dreams Under Alternative Anchors Are the Consequences Different? |
title_exact_search | Bad Dreams Under Alternative Anchors Are the Consequences Different? |
title_exact_search_txtP | Bad Dreams Under Alternative Anchors Are the Consequences Different? |
title_full | Bad Dreams Under Alternative Anchors Are the Consequences Different? Auernheimer, Leonardo |
title_fullStr | Bad Dreams Under Alternative Anchors Are the Consequences Different? Auernheimer, Leonardo |
title_full_unstemmed | Bad Dreams Under Alternative Anchors Are the Consequences Different? Auernheimer, Leonardo |
title_short | Bad Dreams Under Alternative Anchors |
title_sort | bad dreams under alternative anchors are the consequences different |
title_sub | Are the Consequences Different? |
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