Foreign Exchange Hedging with Synthetic Options and the Interest Rate Defense of a Fixed Exchange Rate Regime
Foreign Exchange Hedging with Synthetic Options and the Interest Rate Defense of a Fixed Exchange Rate Regime

Author: Mr.Michael G. Spencer

Publisher: International Monetary Fund

Published: 1994-12-01

Total Pages: 40

ISBN-13: 1451857004

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The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.

Foreign Exchange Hedging with Synthetic Options and the Interest Rate Defense of a Fixed Exchange Rate Regime
Foreign Exchange Hedging with Synthetic Options and the Interest Rate Defense of a Fixed Exchange Rate Regime

Author: Peter M. Garber

Publisher:

Published: 2006

Total Pages: 40

ISBN-13:

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In the end-game of a fixed exchange rate regime, increases in interest rates to defend the currency may lead to an apparently perverse market response: further downward pressure on the exchange rate. This may result if a large proportion of investors` foreign exchange exposure is dynamically hedged. This paper describes the trading operations involved in implementing dynamic hedges and the impact of these operations on central bank policy. The success of an interest rate defense hinges on the size and timing of the funding operations of those who are being squeezed relative to those engaged in dynamic hedging.

Exchange Rates, Capital Flows, and Monetary Policy in a Changing World Economy
Exchange Rates, Capital Flows, and Monetary Policy in a Changing World Economy

Author: William C. Gruben

Publisher: Springer Science & Business Media

Published: 2012-12-06

Total Pages: 247

ISBN-13: 1461561752

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The dramatic growth of international capital flow has provided unprecedented opportunities and risks in emerging markets. This book is the result of a conference exploring this phenomenon, sponsored by the Federal Reserve Bank of Dallas. The issues explored include direct versus portfolio investment; exchange rates and economic growth; and optimal exchange rate policy for stabilizing inflation in developing countries. It concludes with a panel discussion on central bank coordination in the midst of exchange rate instability.

IMF Staff papers, Volume 42 No. 3
IMF Staff papers, Volume 42 No. 3

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

Published: 1995-01-01

Total Pages: 280

ISBN-13: 145197339X

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This paper analyzes long-term exchange rate modeling. The paper reviews the literature that tests for a unit root in real exchange rates and the closely related work on testing for a unit root in the residual from a regression of the nominal exchange rate on relative prices. It argues that the balance of evidence is supportive of the existence of some form of long-term exchange rate relationship. The paper highlights that the form of this relationship, however, does not accord exactly with a traditional representation of the long-term exchange rate.

Working Paper Summaries (WP/94/77 - WP/94/147)
Working Paper Summaries (WP/94/77 - WP/94/147)

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 1995-02-01

Total Pages: 94

ISBN-13: 1451843208

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Authors of Working Papers are normally staff members of the Fund or consultants, although on occasion outside authors may collaborate with a staff member in writing a paper. The views expressed in the Working Papers or their summaries are, however, those of the authors and should not necessarily be interpreted as representing the views of the Fund. Copies of individual Working Papers and information on subscriptions to the annual series of Working Papers may be obtained from IMF Publication Services, International Monetary Fund, 700 19th Street, Washington, D.C. 20431. Telephone: (202) 623-7430 Telefax: (202) 623-7201 This compilation of summaries of Working Papers released during July-December 1994 is being issued as a part of the Working Paper series. It is designed to provide the reader with an overview of the research work performed by the staff during the period.

The Tobin Tax
The Tobin Tax

Author: Mahbub ul Haq

Publisher: New York : Oxford University Press

Published: 1996

Total Pages: 337

ISBN-13: 019511180X

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This guide to coping with financial volatility should be of interest to academics and economists with interest in finance and international development.

IMF Staff papers
IMF Staff papers

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

Published: 1995-01-01

Total Pages: 244

ISBN-13: 1451957068

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This paper provides a critical survey of the literature on politico-institutional determinants of the government budget. We organize our discussion around two questions: Why did certain OECD countries, but not others, accumulate large public debts? Why did these fiscal imbalances appear in the last twenty years rather than sooner? We begin by discussing the “tax smoothing” model and conclude that this approach alone cannot provide complete answers to these questions. We then proceed to a discussion of political economy models, which we organize into six groups: (1) models based upon opportunistic policy makers and naive voters with “fiscal illusion”; (2) models of intergenerational redistributions; (3) models of debt as a strategic variable, linking the current government with the next one; (4) models of coalition governments; (5) models of geographically dispersed interests; and (6) models emphasizing the effects of budgetary institutions. We conclude by briefly discussing policy implications.