| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP15689 |
| DP15689 The Exchange Rate Insulation Puzzle | |
| Giancarlo Corsetti; Keith Kuester; Gernot Müller; Sebastian Schmidt | |
| 发表日期 | 2021-01-20 |
| 出版年 | 2021 |
| 语种 | 英语 |
| 摘要 | The notion that flexible exchange rates insulate a country from foreign shocks is well grounded in theory, from the classics (Meade, 1951; Friedman 1953), to the more recent open economy literature (Obstfeld and Rogoff, 2000). We confront it with new evidence from Europe. Specifically, we study how shocks that originate in the euro area spill over to its neighboring countries. We exploit the variation of the exchange rate regime across time and countries to assess whether the regime alters the spillovers: it does not---flexible exchange rates fail to provide insulation against euro area shocks. This result is robust across a number of specifications and holds up once we control for global financial conditions. We show that the workhorse open-economy model can account for the lack of insulation under a float, assuming that central banks respond to headline consumer price inflation. However, it remains puzzling that policy makers are ready to forego stabilization of economic activity to the extent we found in the data. |
| 主题 | International Macroeconomics and Finance ; Monetary Economics and Fluctuations |
| 关键词 | External shock International spillovers exchange rate Insulation monetary policy Dominant currency pricing Effective lower bound |
| URL | https://cepr.org/publications/dp15689 |
| 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/544698 |
| 推荐引用方式 GB/T 7714 | Giancarlo Corsetti,Keith Kuester,Gernot Müller,et al. DP15689 The Exchange Rate Insulation Puzzle. 2021. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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