Exchange-Rate Flexibility and Reserve Use

John Williamson

A chapter in Flexible Exchange Rates and Stabilization Policy, 1977, pp 195-207 from Palgrave Macmillan

Abstract: Abstract This paper examines whether, as has usually been assumed, there is a trade-off between the degree of flexibility in exchange rates and the extent of reserve use. The first section of the paper constructs a measure of reserve use in order to examine changes in the extent of reserve use since the advent of generalized floating. It is found that reserve use initially tended to increase following the move to floating, and that, despite some subsequent decline, it has remained substantial. The second section constructs and partially solves a formal model designed to illuminate the determinants of reserve use. It is shown that there need not necessarily be a trade-off between exchange-rate flexibility and the extent of reserve use.

Keywords: Exchange Rate; Current Account; Intervention Policy; Foreign Exchange Market; Capital Account (search for similar items in EconPapers)
Date: 1977
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:978-1-349-03359-1_17

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349033591

DOI: 10.1007/978-1-349-03359-1_17

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 ().