Monetary policy and the volatility of real exchange rates in New Zealand
Kenneth West ()
No DP2003/09, Reserve Bank of New Zealand Discussion Paper Series from Reserve Bank of New Zealand
Abstract:
The relationship between interest rates and exchange rates is puzzling and poorly understood. But under some standard assumptions, interest rates can be adjusted to smooth real exchange rate movements at the possible price of increased volatility in other variables. Estimates made under some generous suppositions about what monetary policy is able to accomplish suggest that decreasing real exchange rate volatility by about 25 per cent would require increasing output volatility by about 10-15 per cent, inflation volatility by about 0-15 per cent and interest rate volatility by about 15-40 per cent.
JEL-codes: C51 E2 F31 (search for similar items in EconPapers)
Pages: 30p.
Date: 2003-11
New Economics Papers: this item is included in nep-cba, nep-ifn and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)
Downloads: (external link)
http://www.rbnz.govt.nz/-/media/ReserveBank/Files/ ... ers/2003/dp03-09.pdf
Related works:
Working Paper: Monetary Policy and the Volatility of Real Exchange Rates in New Zealand (2004) 
Journal Article: Monetary policy and the volatility of real exchange rates in New Zealand (2003) 
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:nzb:nzbdps:2003/09
Access Statistics for this paper
More papers in Reserve Bank of New Zealand Discussion Paper Series from Reserve Bank of New Zealand Contact information at EDIRC.
Bibliographic data for series maintained by Reserve Bank of New Zealand Knowledge Centre ().