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On the Link Between Exchange-rate Regimes, Capital Controls and Monetary Policy Autonomy in Small European Countries, 1979–2000.
- Source :
- World Economy; Mar2006, Vol. 29 Issue 3, p341-368, 28p, 7 Charts
- Publication Year :
- 2006
-
Abstract
- We investigate international monetary-policy transmission under different exchange-rate and capital-account regimes in eleven small, open economies during the 1980s and 1990s. We find no systematic link between ex-post monetary-policy autonomy and exchange-rate regimes. Capital controls appear to have provided a degree of temporal insulation from foreign monetary policy shocks, though not strict autonomy. The results are consistent both with short-term autonomy for small countries even under fixed exchange rates and an open capital account, and with long-term dependence under flexible exchange rates and an independent stability target. Results also indicate that euro-area market interest rates are significantly more responsive to the development of the corresponding US rate than were the previous national rates. [ABSTRACT FROM AUTHOR]
- Subjects :
- FOREIGN exchange rates
MONETARY policy
CAPITAL investments
ECONOMIC policy
ECONOMICS
Subjects
Details
- Language :
- English
- ISSN :
- 03785920
- Volume :
- 29
- Issue :
- 3
- Database :
- Complementary Index
- Journal :
- World Economy
- Publication Type :
- Academic Journal
- Accession number :
- 20670784
- Full Text :
- https://doi.org/10.1111/j.1467-9701.2006.00786.x