Achieving Exchange Rate Stability in a Tripolar World: A Target-Zone System with a Rotating Anchor

Kenneth Rogoff, Donald L. Kohn and Reiner König

Chapter 11 in Price Stabilization in the 1990s, 1993, pp 357-389 from Palgrave Macmillan

Abstract: Abstract This chapter considers approaches to choosing an anchor in a target zone exchange rate system among the three major currencies: the yen, the DM and the dollar. Though there is as yet no impetus for a world target zone regime, this situation may well change over the next decade. The present G-7 coordination is generally considered to have been successful in reducing exchange market volatility, but the evidence presented in this chapter calls this view into question. The results here also cast doubt on the view that exchange rate volatility would substantially abate if monetary authorities could only succeed in bringing inflation all the way down to zero. For cross-rates between the dollar, yen and DM, the link between inflation rate levels (or differences) and exchange rate volatility appears tenuous at best.

Keywords: Exchange Rate; Monetary Policy; Central Bank; Inflation Rate; Money Supply (search for similar items in EconPapers)
Date: 1993
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-12893-8_11

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349128938

DOI: 10.1007/978-1-349-12893-8_11

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().