Please use this identifier to cite or link to this item:
Full metadata record
DC FieldValueLanguage
dc.contributor.authorSell, Friedrich L.en_US
dc.description.abstractIn this paper, we discuss the new aspects of exchange rate policy which can be observed in the emergingmarket economies and their most likely implications for allocation, distribution and stabilizationgoals. A special emphasis is put on the Chinese case, where large interventions in the foreignexchange market point at a significant undervaluation of the Renminbi. With many alternatives atchoice, Chinese authorities still prefer to peg their currency, by and large, to the US-Dollar. On July21, 2005 a moderate revaluation and the introduction of a basket peg was announced, but a basketpeg strategy is not yet visible in empirical figures. On the background of Germany's experiences of1969, almost on the eve of the Bretton Woods' system collapse, we model a speculative attack onan undervalued currency in the vein of the Flood-Garber seminal paper from 1984. The contents ofthe model are reflected against today's reality in China, but also against Germany's experiences inthe past century. We come to the conclusion, quite in line with Germany's experience of 1969, thatthe monetary authorities in China should anticipate such an attack and quickly proceed to a revaluationof the Renminbi. We then propose a sequence of reforms/policies which should be implementedin the aftermath.en_US
dc.relation.ispartofseries|aDiskussionsbeiträge / Institut für Volkswirtschaftslehre, Universität der Bundeswehr München |x2006,2en_US
dc.subject.keywordAbsorption Emerging markets economiesen_US
dc.subject.keywordexchange rate policyen_US
dc.subject.keywordspeculative attacken_US
dc.subject.keywordfirst generation modelsen_US
dc.titleThe New Exchange Rate Policy in the Emerging Market Economies: with Special Emphasis on Chinaen_US
dc.typeWorking Paperen_US

Files in This Item:
377.69 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.