Detail Capital flow sterilization in small open economies Bibliografi Author: Calvo, Guillermo A. (Advisor); Kumhof, Michael Topik: ECONOMICS; GENERAL|ECONOMICS; THEORY|BUSINESS ADMINISTRATION; BANKING Bahasa: (EN )    ISBN: 0-599-25489-0     Penerbit: UNIVERSITY OF MARYLAND COLLEGE PARK     Tahun Terbit: 1999     Jenis: Theses - Dissertation Fulltext: 9925816.pdf (0.0B; 0 download) Abstract This dissertation analyzes the role of domestic interest rate policy in the management of volatile capital flows to or from small open economies which maintain fixed exchange rates. As long as domestic bonds are perfect substitutes for international bonds, fixed exchange rates and free capital mobility preclude government control of domestic interest rates. Open market operations to sterilize the effect of capital flows on the domestic money stock must then be ineffective. Imperfect substitutability between domestic and international bonds is therefore essential. It is introduced into the model by allowing for different liquidity characteristics. The domestic banking sector is explicitly modeled. Chapter 1 contains some general remarks concerning the chosen modeling framework. Chapter 2 analyzes the large capital outflows associated with balance-of-payments crises (BOPC). Economic theory predicts that these outflows coincide with a collapse of domestic money demand. Many actual BOPC are instead characterized by a sharp increase in domestic credit. It is shown that this can be explained by a government policy of stabilizing money demand through low interest rates on domestic bonds. While this is likely to succeed, the BOPC will instead happen through bond sales to the central bank, i.e. an increase in domestic credit. Under plausible parameter configurations, it will also happen earlier. The predictions of the model are supported by econometric estimates of the key parameters for Mexico. The model finally studies banking crises as a cause of BOPC, characteristic of many recent episodes. Chapter 3 analyzes large capital inflows, and government attempts to sterilize them in order to stop the associated inflationary consumption booms. Because sterilization requires higher interest rates on domestic bonds, the result is often a perpetuation of capital inflows, of consumption booms and of inflationary pressures. The model provides several possible explanations for this. It suggests that capital inflows can be stopped by paying a lower interest rate on domestic bonds. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Lihat Sejarah Pengadaan  Konversi Metadata   Kembali

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