Monetary Policy Interactions under Managed Exchange Rates

Francesco Giavazzi () and Alberto Giovannini

No 123, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies monetary policy games in a two-period Mundell-Fleming model, under a regime of managed exchange rates. A regime of managed exchange rates is defined as one where exchange rates are pegged but bilateral parities can be changed from time to time. The paper argues that such a regime is the most appropriate description of the Bretton Woods system and many arrangements currently in existence. We show that Cournot-Nash equilibria under managed rates differ significantly from those under fixed or floating rates. Under managed rates the world-wide efficiency losses from lack of coordination are not equally shared by all countries.

Keywords: Exchange Rates; Monetary Policy; Mundell-Fleming Model (search for similar items in EconPapers)
Date: 1986-08
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=123 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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:cpr:ceprdp:123

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=123

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().