English, Article edition: Can a Currency Board or a Hard Peg be Unstable? The Case of China Patrick Artus

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/158245
Physical Description
  • article
Language
  • English

Edition details

Title
  • Can a Currency Board or a Hard Peg be Unstable? The Case of China
Author
  • Patrick Artus
Physical Description
  • article
Notes
  • A currency board (an exchange rate regime where monetary policy depends on the evolution of foreign exchange reserves) is normally stabilizing. A loss of reserves, for instance, leads to an increase in interest rates that slows down production and improves the trade balance, resulting in an increase in foreign exchange reserves. The example of China, however, shows that a currency board or an exchange rates regime very close to a currency board can lead to dynamic instability, with an endless accumulation of foreign exchange reserves. We build a theoretical dynamic model that explains the fluctuations in exchange rate, prices, credit, interest rates and production to examine several processes that could explain this dynamic instability: rigidity of interest rates, absence of international mobility of capital (due for instance to capital controls) endogeneity of the supply of goods and stickiness of prices. The lack of financial liberalisation plays a central role in explaining the absence of stabilizing properties of the currency board in China.
  • Exchange rate regime; capital mobility; yuan currency peg; exchange rate policy
  • RePEc:cii:cepiei:2007-3ta
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment