Lecture 23-Exchange rate regimes.pdf

Lecture 23-Exchange rate regimes.pdf - 30-Jan-18...

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30-Jan-18 1 MACROECONOMICS LECTURE 23 EXCHANGE RATE REGIMES CONTENTS OF THE LECTURE 1. Types of exchange rate regimes 2. Flexible exchange rate regimes 3. Fixed exchange rate regimes 4. Crawling peg and the EMS CONTENTS OF THE LECTURE 1. Types of exchange rate regimes 2. Flexible exchange rate regimes 3. Fixed exchange rate regimes 4. Crawling peg and the EMS
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30-Jan-18 2 1. TYPES OF EXCHANGE RATE REGIMES 4 The exchange rate regimes refer to the ways that monetary authorities manage their currencies in relation to other currencies. At one end of the spectrum are countries with flexible exchange rates that have no explicit exchange rate targets. At the other end are countries that operate under fixed exchange rates . Between the two extremes are countries with various degrees of commitment (e.g. crawling peg or EMS). CONTENTS OF THE LECTURE 1. Types of exchange rate regimes 2. Flexible exchange rate regimes 3. Fixed exchange rate regimes 4. Crawling peg and the EMS 2. FLEXIBLE EXCHANGE RATE REGIMES 6 Countries with flexible exchange rates include the US, the UK, Japan and Canada. Although the central banks of these countries probably do not ignore movements in the exchange rate, they have shown themselves quite willing to let their exchange rates fluctuate considerably.
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