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Reference: Courtney, M. M. (Mark M.), (1983). Some problems of exchange-rate policy and stabilization in an open economy. DPhil. University of Oxford.Citable link to this page:


Some problems of exchange-rate policy and stabilization in an open economy

Abstract: The immediate objectives of exchange-rate policy should bestability of output, stability of the rate of inflation and stabilityof the exchange rate itself. Moreover, exchange-rate policy is likelyto be of some use in achieving these aims, as the modifications tothe rational expectations theory which make monetary policy effectivedo so for exchange-rate policy as well, and additional channels ofeffectiveness operate in an open economy.There are various explanations for the volatility of exchangerates under free floating, but a more realistic picture of thereaction to external disturbances is obtained if step changes ininterest rates are allowed for by considering the term structure ofinterest rates and the influence of the terms of trade on the demandfor money.Capital is not in fact perfectly mobile internationally, whichwidens the range of policy options, and some modifications of thetheory are required to study the determinants of capital flows in animperfect world.One can use the correlation between deviations of output andinflation from trend to study the origin of disturbances. This isillustrated by a study of eighteen sub-Saharan African countries.Furthermore, the type and origin of disturbances have implicationsfor whether some sort of dual exchange-rate or dual interest-ratesystem is desirable.Finally, a model of an open economy is presented in whichexchange-rate policy can be analyzed whether specified in terms ofexchange-rate targets or the degree of intervention, and with thepossibility of a restricted forward foreign-exchange market.A variant of the model is estimated for South Africa for the period1974-1981 and various exchange-rate policies are simulated.

Type of Award:DPhil Level of Award:Doctoral Awarding Institution: University of Oxford Notes:This thesis was digitised thanks to the generosity of Dr Leonard Polonsky.

Bibliographic Details

Issue Date: 1983Identifiers

Urn: uuid:f7365146-75f0-4af5-8a74-12e6c1ec48a9

Source identifier: 602367841 Item Description

Type: Thesis;

Language: eng Subjects: Economic stabilization Foreign exchange rates Government policy Tiny URL: td:602367841


Author: Courtney, M. M. Mark M. - institutionUniversity of Oxford facultyFaculty of Social Studies - - - - Bibliographic Details Issue Da



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