Electronic Resource
Oxford, UK and Boston, USA
:
Blackwell Publishers Ltd
Pacific economic review
3 (1998), S. 0
ISSN:
1468-0106
Source:
Blackwell Publishing Journal Backfiles 1879-2005
Topics:
Economics
Notes:
In this paper, we analyse the problem of optimal domestic credit expansion for a small open economy. We 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 repeg 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.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1111/1468-0106.00053
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