POLICY MEASURES TO AVOID A CURRENCY CRISIS

F G Ozkan, A Sutherland

Research output: Contribution to journalArticlepeer-review

Abstract

This paper considers a number of policy measures that may be used to preserve a fixed exchange rate. These are analysed in a model where a switch of exchange rate regime is triggered by an optimising policy-maker in response to extreme economic conditions. It is shown how a number of policy measures can be used to alter the balance between the costs and benefits of switching between regimes. These policy measures have both a direct effect on the policy-maker's choice of regime switching point and an indirect effect through private-sector expectations of a regime switch.

Original languageEnglish
Pages (from-to)510-519
Number of pages10
JournalEconomic journal
Volume105
Issue number429
Publication statusPublished - Mar 1995

Keywords

  • OF-PAYMENTS CRISES
  • BALANCE

Cite this