Exchange Rates as a ‘Veil'

Biagio Bossone

World Economics, 2018, vol. 19, issue 2, 105-120

Abstract: The effectiveness of exchange rates as an adjustment mechanism in a given country depends on the role played by domestic financial markets. With floating exchange rates and full integration into global financial markets, policy-making space is determined by the size of public debt and the degree of policy credibility. A large debt and weak policy credibility inhibit the power of floating rates to insulate the economy from shocks and to grant independence to its policymakers. When a country's financial stocks are of significant size, market expectations are the fundamental determinant of equilibrium exchange rates and purchasing power.

Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldeconomics.com/Journal/Papers/Article.details?ID=708 (application/pdf)

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:wej:wldecn:708

Access Statistics for this article

More articles in World Economics from World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE
Bibliographic data for series maintained by Ed Jones ().