Exchange Rate Management in an Era of Global Financial Crises with special reference to Australia

J.W. Nevile (), Peter Kriesler and Geoffrey Harcourt
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J.W. Nevile: School of Economics, The University of New South Wales

No 2012-05, Discussion Papers from School of Economics, The University of New South Wales

Abstract: Unless there is a radical reform of the global financial system, it will continue to be conducive to financial crises and the necessary reforms are looking increasingly unlikely. Government rhetoric and actions can often influence in desirable ways both the speculative actions that now determine the exchange rate and the effect of exchange rate movements on the domestic economy. Managing the exchange rate should start with Australian support for measures such as the Tobin tax which dampen speculation. In 2008 and 2009 exchange rate changes were helpful in reducing the impact of the global financial crisis Australia, largely because of a very clear commitment by the Australian government to make preservation of jobs its top priority. In 2009 a rapid rise in the exchange rate was unhelpful. In the short run little can be done about this but the longer run it is possible to offset the adverse effects.

Keywords: exchange rates; global financial system; Tobin tax; speculation; macroeconomic policy. (search for similar items in EconPapers)
JEL-codes: E44 E60 F30 F41 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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