| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP8275 |
| DP8275 Pegs and Pain | |
| Martín Uribe; Stephanie Schmitt-Grohé | |
| 发表日期 | 2011-02-28 |
| 出版年 | 2011 |
| 语种 | 英语 |
| 摘要 | This paper quantifies the costs of adhering to a fixed-exchange-rate arrangement, such as a currency union, for emerging economies. To this end it develops a novel dynamic stochastic disequilibrium model of a small open economy with monetary nonneutrality due to downward nominal wage rigidity. In the model, a negative external shock causes persistent unemployment because the fixed exchange rate and downward wage rigidity stand in the way of real depreciation. In these circumstances, optimal exchange-rate policy calls for large devaluations. In a calibrated version of the model, a large contraction, defined as a two-standard-deviation decline in tradable output causes the unemployment rate to rise by more than 20 percentage points under a peg. The required devaluation under the optimal exchange-rate policy is more than 50 percent. The median welfare cost of a currency peg is shown to be enormous, about 10 percent of lifetime consumption. Adhering to a fixed exchange-rate arrangement is found to be more costly when initial fundamentals are characterized by high past wages, large external debt, high country premia, or unfavorable terms of trade. |
| 主题 | International Macroeconomics |
| 关键词 | Currency pegs Currency unions Devaluation Disequilibrium model Downward wage rigidity Unemployment |
| URL | https://cepr.org/publications/dp8275 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/537112 |
| 推荐引用方式 GB/T 7714 | Martín Uribe,Stephanie Schmitt-Grohé. DP8275 Pegs and Pain. 2011. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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