EXCHANGE RATE REGIME AND MACROECONOMIC STABILITY. A LITERATURE SURVEY

Patricia Amalia MERCEA (handro) ()
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Patricia Amalia MERCEA (handro): University of Craiova, Romania

Contemporary Economy Journal, 2020, vol. 5, issue 1, 67-71

Abstract: Globalization and short-term capital inflow volatilities generate challenges for policies and countries, as well as for global and regional markets. An appropriate exchange rate policy tool, complemented by reserve accumulation, macroprudential measures and, when needed, capital control is some of the instruments that could produce effective safety nets and macro stability. A conclusion of our research is that flexible regimes are preferred by developed countries, with credible institutions that rely on deep capital markets. Emerging economies with unreliable institutions prefer stability as the fixed rate gives credibility and the macroeconomic stability can be achieved without best macro conditions.

Keywords: Exchange rate; Exchange rate volatility; International Trade; Stable Growth; Macroeconomic stability (search for similar items in EconPapers)
JEL-codes: E42 F31 F43 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:brc:brccej:v:5:y:2020:i:1:p:67-71

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