Monetary Rules for Emerging Market Economies /

We compare the performance of a currency board, inflation targeting, and dollarization in a small, open developing economy with a liberalized capital account. We focus on the transmission of shocks to currency and country risk premia and on the role of fluctuations in premia in the propagation of ot...

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Bibliographic Details
Main Author: Rebucci, Alessandro
Other Authors: Ghironi, Fabio
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2002.
Series:IMF Working Papers; Working Paper ; No. 2002/034
Online Access:Full text available on IMF
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300 |a 1 online resource (41 pages) 
490 1 |a IMF Working Papers 
500 |a <strong>Off-Campus Access:</strong> No User ID or Password Required 
500 |a <strong>On-Campus Access:</strong> No User ID or Password Required 
506 |a Electronic access restricted to authorized BRAC University faculty, staff and students 
520 3 |a We compare the performance of a currency board, inflation targeting, and dollarization in a small, open developing economy with a liberalized capital account. We focus on the transmission of shocks to currency and country risk premia and on the role of fluctuations in premia in the propagation of other shocks. We calibrate our model on Argentina. The framework matches the second moments of key variables well. Welfare analysis suggests that dollarization is preferable to alternative regimes because it removes currency premium volatility. However, a currency board can match dollarization on welfare grounds if the central bank holds a sufficiently large stock of foreign reserves. 
538 |a Mode of access: Internet 
700 1 |a Ghironi, Fabio. 
830 0 |a IMF Working Papers; Working Paper ;  |v No. 2002/034 
856 4 0 |z Full text available on IMF  |u http://elibrary.imf.org/view/journals/001/2002/034/001.2002.issue-034-en.xml  |z IMF e-Library