search query: @journal_id 1626 / total: 27
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| Author: | Hung, N. Quyen, N. |
| Title: | Collapsing exchange rate regime under optimal monetary control |
| Journal: | Pacific Economic Review
1998 : OCT, VOL. 3:3, p. 203-217 |
| Index terms: | EXCHANGE RATES MONETARY CONTROL ECONOMICS |
| Language: | eng |
| Abstract: | In this paper, the authors analyze the problem of optimal domestic credit expansion for a small open economy. The authors show that (i) the transition from the fixed to the flexible exchange rate regime proceeds smoothly with no speculative attack on the central bank's foreign reserves; (ii) once the exchange rate has floated, it will never be optimal to repel it afterward; (iii) even under uncertainty, there will not be any speculative attack; however, the optimal rate of credit expansion jumps discontinuously at the date of complete depletion of the known stock of foreign reserves. |
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