[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v8y1990i2p1-17.html
   My bibliography  Save this article

Interest Rate Volatility And Exchange Risk: New Rules For A Common Monetary Standard

Author

Listed:
  • RONALD I. McKINNON
Abstract
How does the choice of an exchange rate regime influence the volatility of interest rates? Are floating exchange rates useful “shock absorbers” that dampen fluctuations in domestic interest rates and prices or do they create additional risk that increases interest rate volatility and segments the international capital market? The answers are best seen in historical perspective.

Suggested Citation

  • RONALD I. McKINNON, 1990. "Interest Rate Volatility And Exchange Risk: New Rules For A Common Monetary Standard," Contemporary Economic Policy, Western Economic Association International, vol. 8(2), pages 1-17, April.
    • Handle: RePEc:bla:coecpo:v:8:y:1990:i:2:p:1-17
    DOI: 10.1111/j.1465-7287.1990.tb00587.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7287.1990.tb00587.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1465-7287.1990.tb00587.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Frenkel, Jacob A & Mussa, Michael L, 1980. "The Efficiency of Foreign Exchange Markets and Measures of Turbulence," American Economic Review, American Economic Association, vol. 70(2), pages 374-381, May.
    2. Frenkel, Jacob A. & Razin, Assaf, 1980. "Stochastic prices and tests of efficiency of foreign exchange markets," Economics Letters, Elsevier, vol. 6(2), pages 165-170.
    3. Robert N. McCauley & Steven A. Zimmer, 1989. "Explaining international differences in the cost of capital," Quarterly Review, Federal Reserve Bank of New York, vol. 14(Sum), pages 7-28.
    4. McKinnon, Ronald I, 1988. "Monetary and Exchange Rate Policies for International Financial Stability: A Proposal," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 83-103, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.
    2. Barry Eichengreen., 1993. "International Monetary Arrangements for the 21st Century," Center for International and Development Economics Research (CIDER) Working Papers C93-021, University of California at Berkeley.
    3. Lawrence Goldberg & James Lothian & John Okunev, 2003. "Has International Financial Integration Increased?," Open Economies Review, Springer, vol. 14(3), pages 299-317, July.
    4. Stijn Claessens & M. Ayhan Kose, 2017. "Asset prices and macroeconomic outcomes: A survey," CAMA Working Papers 2017-76, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    5. Ronald McKinnon, 1990. "Why floating exchange rates fall: A reconsideration of the liquidity trap," Open Economies Review, Springer, vol. 1(3), pages 229-250, October.
    6. MKC Jackson, 2002. "Reserve Bank Independence : A Post Keynesian Perspective," South African Journal of Economics, Economic Society of South Africa, vol. 70(1), pages 29-52, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maurice Obstfeld, 1995. "Intenational Currency Experience: New Lessons and Lessons Relearned," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 119-220.
    2. Ronald McKinnon, 1990. "The exchange rate and the trade balance," Open Economies Review, Springer, vol. 1(1), pages 17-37, February.
    3. Frenkel, Jacob A. & Mussa, Michael L., 1985. "Asset markets, exchange rates and the balance of payments," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 14, pages 679-747, Elsevier.
    4. Bosi, Stefano & Fontaine, Patrice & Le Van, Cuong, 2016. "Interest rates parity and no arbitrage as equivalent equilibrium conditions in the international financial assets and goods markets," Mathematical Social Sciences, Elsevier, vol. 82(C), pages 26-36.
    5. Edwards, Sebastian, 1983. "Floating exchange rates, expectations and new information," Journal of Monetary Economics, Elsevier, vol. 11(3), pages 321-336.
    6. Kunze, Frederik, 2017. "Predicting exchange rates in Asia: New insights on the accuracy of survey forecasts," University of Göttingen Working Papers in Economics 326, University of Goettingen, Department of Economics.
    7. Alan G. Futerman, 2021. "Passive money system and control of exchange rates: The case of Argentina 1976–1981," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5512-5530, October.
    8. Richard M. Levich, 1983. "Empirical Studies of Exchange Rates: Price Behavior, Rate Determinationand Market Efficiency," NBER Working Papers 1112, National Bureau of Economic Research, Inc.
    9. Blau, Benjamin M., 2018. "Exchange rate volatility and the stability of stock prices," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 299-311.
    10. Anna J. Schwartz, 1987. "The Postwar Institutional Evolution of the International Monetary System," NBER Chapters, in: Money in Historical Perspective, pages 333-363, National Bureau of Economic Research, Inc.
    11. Jacob A. Frenkel, 1982. "United States Inflation and the Dollar," NBER Chapters, in: Inflation: Causes and Effects, pages 189-210, National Bureau of Economic Research, Inc.
    12. Habib, Maurizio Michael, 2002. "Financial contagion, interest rates and the role of the exchange rate as shock absorber in Central and Eastern Europe," BOFIT Discussion Papers 7/2002, Bank of Finland, Institute for Economies in Transition.
    13. Fischer, Malte, 1997. "Wechselkursunsicherheit und Außenhandel: Eine Analye der theoretischen Literatur," Kiel Working Papers 830, Kiel Institute for the World Economy (IfW Kiel).
    14. Ronald McKinnon, 1990. "Why floating exchange rates fall: A reconsideration of the liquidity trap," Open Economies Review, Springer, vol. 1(3), pages 229-250, October.
    15. Stefano Bosi & Patrice Fontaine & Cuong Le Van, 2013. "Equilibrium existence in the international asset and good markets," Working Papers 2013-3, Department of Research, Ipag Business School.
    16. Jacob A. Frenkel, 1991. "The Collapse of Purchasing Power Parities during the 1970s," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 217-237, National Bureau of Economic Research, Inc.
    17. McKinnon, Ronald I., 2015. "Mundell, the Euro, and the World Dollar Standard," Journal of Policy Modeling, Elsevier, vol. 37(3), pages 450-459.
    18. Frederik Kunze, 2020. "Predicting exchange rates in Asia: New insights on the accuracy of survey forecasts," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(2), pages 313-333, March.
    19. Richard C. Marston & Guido Carli & Jacques Attali & John R. Petty & Robert Solomon, 1988. "Exchange Rate Coordination," NBER Chapters, in: International Economic Cooperation, pages 79-166, National Bureau of Economic Research, Inc.
    20. Edwards, Sebastian, 1982. "Exchange rates and `news': A multi-currency approach," Journal of International Money and Finance, Elsevier, vol. 1(1), pages 211-224, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:8:y:1990:i:2:p:1-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.