Propagation of Speculative Cycles: The Exchange Rate Channel

Massimiliano La Marca ()

Journal of Development Studies, 2012, vol. 48, issue 6, 695-713

Abstract: The nominal and real exchange rates are key relative prices within and between economies. Their volatility and gyrations can have significant cumulative effects on the development pattern of financially integrated economies. The article documents the linkage between global risk aversion and the exchange rate of some developed and developing economy currencies characterised by large short-term interest rate differentials. If capital flows can drive exchange rates and transmit international speculative cycles inside the economic system, a careful design of monetary policy, exchange rate and capital management regimes is a fundamental ingredient of a successful development strategy.

Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00220388.2011.649262 (text/html)
Access to full text is restricted to subscribers.

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:taf:jdevst:v:48:y:2012:i:6:p:695-713

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/00220388.2011.649262

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().