The link between interest rates and exchange rates: Do contractionary depreciations make a difference?

International Economic Journal

Volumn 22, Issue 1, 2008, Pages 43-61

  Sanchez, Marcelo ^a  

^a EUROPEAN CENTRAL BANK   (Germany)

Author keywords

Emerging market economies; Exchange rate; Monetary policy; Transmission mechanism

Indexed keywords

EID: 40449130057     PISSN: 10168737     EISSN: 1743517X     Source Type: Journal    
DOI: 10.1080/10168730801898981     Document Type: Article

References (43)

1. ADB (1999) Key indicators of developing Asian and pacific countries 1999, Asian Development Bank, Manila
2. Ahmed, Shaghil (2003) Sources of economic fluctuations in Latin America and implications for the choice of exchange rate regimes. Journal of Development Economics, 72, pp. 181-202.
3. Amato, Jeffery and Gerlach, Stefan (2002) Inflation targeting in emerging market and transition economies: Lessons after a decade. European Economic Review, 46, pp. 781-790.
4. Ball, Laurence (1999) Policy rules for open economies. Monetary policy rules, pp. 127-144. University of Chicago Press, Chicago
5. Ball, Laurence (2002) Policy rules and external shocks. Monetary policy: Rules and transmission mechanisms, pp. 47-63. Central Bank of Chile, Santiago de Chile
6. Broadbent, Ben and Barro, Robert (1997) Central Bank preferences and macroeconomic equilibrium. Journal of Monetary Economics, 39, pp. 17-43.
7. Ca' Zorzi, Michele, Elke, Hahn and Marcelo, Sánchez (2007) Exchange rate pass-through in emerging markets. ICFAI Journal of Monetary Economics, 4, pp. 84-102.
8. Calvo, Guillermo (2001) Capital markets and the exchange rate. With special reference to the dollarization debate in Latin America. Journal of Money, Credit and Banking, 33, pp. 312-334.
9. Calvo, Guillermo and Reinhart, Carmen (2001) Fixing for Your life. Brookings trade forum: 2000, pp. 1-57. Brookings Institution Press, Washington, DC
10. Calvo, Guillermo and Reinhart, Carmen (2001) When capital inflows come to a sudden stop: Consequences and policy options. Key issues in reform of the international monetary system, International Monetary Fund, Washington, DC
11. Calvo, Guillermo and Reinhart, Carmen (2002) Fear of floating. Quarterly Journal of Economics, 117, pp. 379-408.
12. Caputo, Rodrigo (2004) Exchange rates and monetary policy in open economies: The experience of Chile in the nineties. Central Bank of Chile
13. Carare, Alina and Stone, Mark (2003) Inflation targeting regimes.
14. Cavoli, Toni and Rajan, Ramkishen (2005) Inflation targeting and monetary policy rules for small and open developing economies: Simple analytics with application to Thailand.
15. Céspedes, Luis, Chang, Roberto and Velasco, Andrés (2003) IS-LM-BP in the Pampas. pp. 143-156.
16. Céspedes, Luis, Chang, Roberto and Velasco, Andrés (2004) Balance sheets and exchange rates. American Economic Review, 94, pp. 1183-1193.
17. Cook, David (2004) Monetary policy in emerging markets: Can liability dollarization explain contractionary devaluations?. Journal of Monetary Economics, 51, pp. 1155-1181.
18. Detken, Carsten and Gaspar, Vitor (2003) Maintaining price stability under free-floating: A fearless way out of the corner?.
19. ECLAC (2000) Economic Survey of Latin America and the Caribbean 1999-2000, ECLAC, Santiago de Chile
20. ECLAC (2002) Economic Survey of Latin America and the Caribbean 2001-2002, ECLAC, Santiago de Chile
21. Eichengreen, Barry (2004) Monetary and exchange rate policy in Korea: assessments and policy issues.
22. Eichengreen, Barry (2005) Can emerging markets float? Should they inflation target?. Exchange rates, capital movements and policy, Routledge, London
23. Fraga, Arminio, Goldfajn, Ilan and Minella, Andre (2003) Inflation targeting in emerging market economies. NBER macroeconomics annual, pp. 365-400. NBER, Washington, DC
24. Frankel, Jeffrey (2005) Contractionary currency crashes in developing Countries. IMF Staff Papers, 52, pp. 149-192.
25. Galí, Jordi and Monacelli, Tomasso (2005) Monetary policy and exchange rate volatility in a small open economy. Review of Economic Studies, 72, pp. 707-734.
26. Gerlach, Stefan and Smets, Frank (2000) MCIs and monetary policy. European Economic Review, 44, pp. 1677-1700.
27. IMF (1999) World currency yearbook 1999, IMF, Washington, DC
28. IMF (2004) Learning to float: The experience of emerging market countries since the early 1990s. World economic outlook, pp. 89-112. IMF, Washington, DC
29. Jeanne, Olivier and Masson, Paul (2000) Currency crises, sunspots and Markov-switching regimes. Journal of International Economics, 50, pp. 327-350.
30. Levy-Yeyati, Eduardo and Sturzenegger, Federico (2005) Classifying exchange rate regimes: Deeds vs. words. European Economic Review, 49:6, pp. 1603-1635.
31. Lizondo, Saul and Montiel, Peter (1989) Contractionary Devaluation in developing countries: An analytical overview. IMF Staff Papers, 36, pp. 182-227.
32. McCallum, Bennett and Nelson, Edward (1999) Nominal income targeting in an open economy optimizing model. Journal of Monetary Economics, 43, pp. 553-578.
33. McCallum, Bennett and Nelson, Edward (2000) Monetary policy for an open economy: An alternative framework with optimizing agents and sticky prices. Oxford Review of Economic Policy, 16, pp. 74-91.
34. Mohanty, M. S. and Klau, Marc (2004) Monetary policy rules in emerging market economies: Issues and evidence.
35. Morón, Eduardo and Winkelried, Daniel (2005) Monetary policy rules for financially vulnerable economies. Journal of Development Economics, 76, pp. 1-26.
36. Reinhart, Carmen and Rogoff, Kenneth (2004) The modern history of exchange rate arrangements: A reinterpretation. Quarterly Journal of Economics, 119, pp. 1-48.
37. Sánchez, Marcelo (2007) What drives business cycles and international trade in emerging market economies?.
38. Sánchez, Marcelo (2008) How does information affect the comovement between interest rates and exchange rates. Rivista Internazionale di Scienze Sociali
39. Shambaugh, Jay (2004) The effect of fixed exchange rates on monetary policy. Quarterly Journal of Economics, 119, pp. 301-352.
40. Svensson, Lars (2000) Open-economy inflation targeting. Journal of International Economics, 50, pp. 155-183.
41. Taylor, John (2001) The role of the exchange rate in monetary policy rules. American Economic Review, Papers and Proceedings, 91, pp. 263-267.
42. Willett, Tom (2003) Fear of floating needn't imply fixed rates: Feasible options for intermediate exchange rate regimes. Open Economics Review, 14, pp. 71-91.
43. Woodford, Michael (2003) Interest and prices, Princeton University Press, Princeton, NJ