Stochastic Disturbances and Exchange Rates
Walter Enders and
Harvey Lapan
ISU General Staff Papers from Iowa State University, Department of Economics
Abstract:
One of the central issues in the ongoing debate concerning fixed versus flexible exchange rates is the comparative stabilizing properties of monetary changes as opposed to exchange rate changes. Fixed and flexible exchange rate regimes have been differentiated according to the ability of the private sector of an economy to alter the nominal value of its domestic money supply via the balance of payments. A disturbance which would lead a nation to experience a balance of payments deficit (surplus) in a fixed rate regime would lead to a depreciation (appreciation) of that nation's currency in a flexible exchange rate regime .2 In order to determine whether monetary or exchange rate changes--and, as a consequence, fixed or flexible exchange rates--best stabilize an economy from a given disturbance, it is necessary to consider the source of the disturbance, the nature of the economic system in question, and the variable(s) to be stabilized.
Date: 1978-01-01
References: Add references at CitEc
Citations:
Downloads: (external link)
https://dr.lib.iastate.edu/server/api/core/bitstre ... d882095fd167/content
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:isu:genstf:197801010800001155
Access Statistics for this paper
More papers in ISU General Staff Papers from Iowa State University, Department of Economics Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070. Contact information at EDIRC.
Bibliographic data for series maintained by Curtis Balmer ().