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Please use this identifier to cite or link to this item: http://hdl.handle.net/2344/912

タイトル: Liability dollarization and fear of floating
著者: Nguyen, Quoc Hung
キーワード: Developing countries
Foreign exchange
Exchange control
Liability Dollarization
Fear of Floating
Imported Goods
Issue Date: Aug-2010
出版者: Institute of Developing Economies, JETRO
引用: IDE Discussion Paper. No. 247. 2010.8
抄録: This paper explores the idea that fear of floating can be justified as an optimal discretionary monetary policy in a dollarized emerging economy. Specifically, I consider a small open economy in which intermediate goods importers borrow in foreign currency and face a credit constraint. In this economy, exchange rate depreciation not only worsens importers' net-worth but also increases the financing amount in domestic currency, therefore exaggerating their borrowing finance premium. Besides, because of high exchange rate pass-through into import prices, fluctuations in the exchange rate also have strong impacts on domestic prices and production. These effects, together, magnify the macroeconomic consequences of the floating exchange rate policy in response to external shocks. The paper shows that the floating exchange rate regime is dominated by the fixed exchange rate regime in the role of cushioning shocks and in welfare terms.
URI: http://hdl.handle.net/2344/912
Appears in Collections:04.IDE Discussion Paper
01.経済、産業(Economy and Industry)/特定地域なし(Non Region-specific Studies)

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