Inflation Targeting, Flexible Exchange Rates, and Macroeconomic Performance Since the Great Recession

2013 ◽  
Author(s):  
Thomas Barnebeck Andersen ◽  
Nikolaj Malchow-MMller ◽  
Jens J. Nordvig
Keyword(s):  
Exchange Rates ◽  
Great Recession ◽  
Inflation Targeting ◽  
Macroeconomic Performance ◽  
The Great Recession ◽  
Flexible Exchange Rates

Inflation targeting and macroeconomic performance since the Great Recession

2015 ◽  
Vol 67 (3) ◽  
pp. 598-613 ◽  
Author(s):  
Thomas Barnebeck Andersen ◽  
Nikolaj Malchow-Møller ◽  
Jens Nordvig
Keyword(s):  
Great Recession ◽  
Inflation Targeting ◽  
Macroeconomic Performance ◽  
The Great Recession

scholarly journals Vehicle Currency Pricing and Exchange Rate Pass-Through

2021 ◽  
Author(s):  
Natalie Chen ◽  
Wanyu Chung ◽  
Dennis Novy
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Great Recession ◽  
Firm Level ◽  
Bilateral Exchange ◽  
The Great Recession ◽  
Pass Through ◽  
Exchange Rate Changes ◽  
Exchange Rate Pass Through ◽  
The Relationship

Abstract Using detailed firm-level transactions data for UK imports, we find that invoicing in a vehicle currency is pervasive, with more than half of the transactions in our sample invoiced in neither sterling nor the exporter’s currency. We then study the relationship between invoicing currencies and the response of import unit values to exchange rate changes. We find that for transactions invoiced in a vehicle currency, import unit values are much more sensitive to changes in the vehicle currency than in the bilateral exchange rate. Pass-through therefore substantially increases once we account for vehicle currencies. This result helps to explain why UK inflation turned out higher than expected when sterling depreciated during the Great Recession and after the Brexit referendum. Finally, within a conceptual framework we show why bilateral exchange rates are not suitable for capturing exchange rate pass-through under vehicle currency pricing. Overall, our results help to clarify why the literature often finds a disconnect between exchange rates and prices when vehicle currencies are not accounted for.

scholarly journals What to Smooth: Rate of Interest or the Foreign Exchange? Turkish Monetary Policy under Turbulent Times

2014 ◽  
Vol 10 (3) ◽  
Author(s):  
A. Erinc Yeldan ◽  
Gunes Kolsuz ◽  
Burcu Unuvar
Keyword(s):  
Interest Rate ◽  
Foreign Exchange ◽  
Great Recession ◽  
Inflation Targeting ◽  
Policy Option ◽  
The Great Recession ◽  
Turbulent Times ◽  
Exchange Markets ◽  
The Interest Rate ◽  
Republic Of Turkey

AbstractThis paper studies the new monetary stance of the Central Bank of Republic of Turkey (CBRT) during the Great Recession. We note that characteristics of the post-1997 “Great Moderation” revealed interest rate smoothing as a valid policy option for the inflation targeting central banks. Utilizing econometric analysis on a general form of a Taylor Rule, we search for the relative weights of the objective function of the CBRT over Jan 2010–Dec 2013. We find that over the Great Recession, the CBRT’s focus on “interest smoothing” had been maintained; and yet the burden of adjustment fell disproportionately on the foreign exchange markets. Furthermore, weak credibility of the CBRT, lack of a simple policy rule, and noisy policy communications evidence that pre-requisites of the interest rate smoothing are not being fulfilled. Inevitable sharp policy corrections that follow smoothing periods proved insufficient against the voluminous global flows.

scholarly journals Sustainable Real Exchange Rates in the New Eu Member States: What Did the Great Recession Change?

2010 ◽  
Vol 10 (198) ◽  
pp. 1
Author(s):  
Katerina Smídková ◽  
Jan Babecky ◽  
Ales Bulir ◽  
◽  
◽  
...  
Keyword(s):  
Exchange Rates ◽  
Great Recession ◽  
Real Exchange Rates ◽  
Member States ◽  
The Great Recession ◽  
Eu Member States ◽  
New Eu Member States
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