The Choice of Exchange Rate Regime and Monetary Target in Highly Dollarized Economies

Exchange Rate Pass-Through and Inflation in Dollarized Economies: Evidence from the Middle Eastern and North African Countries

T he investigation of exchange rate pass-through is an important issue in international finance. The relationship between exchange rate pass-through and exchange rate arrangements such as the dollarization regime has been examined in recent decades. For this purpose, the main objective of this study is to investigate the effect of exchange rate pass-through on the domestic inflation in selecte...

The Impact of Monetary Regime on the Exchange Rate Pass-Through under Exchange Rate Volatility (Dynamic Panel Data Approach)

Monetary and Exchange Rate Policy in Multisectorial Economies

We develop a two-sector economy where each sector is classified as classical/Keynesian (contract/noncontract) in the labor market and traded/nontraded in the product market. We consider the effects of changes in monetary and exchange rate policy on sectoral and aggregate prices and outputs for different sectoral characterizations. Duca (1987) shows that nominal wage rigidity facilitates the eff...

Informed Speculation and the Choice of Exchange Rate Regime

This paper explores the classic question regarding the costs and bene ̄ts of limiting exchange rate volatility starting from the premise that asset markets play an important role in aggregating information. I ̄nd that government trading, despite being completely observed, alters the ability of an asset market to reveal information. The main insight of the paper is that managing the exchange rate...

The Choice of Exchange-rate Regime and Speculative Attacks

We develop a framework for studying the choice of exchange rate regime in an open economy where the local currency is vulnerable to speculative attacks. The framework makes it possible to study, for the first time, the strategic interaction between the ex ante choice of regime and the likelihhod of ex post currency attacks. The optimal regime is determined by a policymaker who trades off the lo...