Exchange Rate Policy Under Sovereign Default Risk
Copyright policy )Exchange Rate Policy Under Sovereign Default Risk
We examine monetary policy options for a small open economy where sovereign default might occur due to intertemporal insolvency. Under interest rate policy and floating exchange rates the equilibrium is indetermined. Under a fixed exchange rate the equilibrium is uniquely determined and independent of sovereign default.
Discussion Paper / SFB 823 ; 07/2011
- TU Dortmund University Germany
- Technische Universität Dortmund
- University of Cologne Germany
- University of Amsterdam Netherlands
Exchange rate peg, sovereign default, Kleine offene Volkswirtschaft, Exchange rate peg, interest rate policy, equilibrium determination, sovereign default, public debt, interest rate policy, 330, Equilibrium, Intertemporal insolvency, 310, Zinspolitik, public debt, Small open economy, info:eu-repo/classification/ddc/310, E52, Internationale Staatsschulden, Länderrisiko, F31, info:eu-repo/classification/ddc/330, ddc:330, equilibrium determination, 620, Flexibler Wechselkurs, Monetary policy options, E63, info:eu-repo/classification/ddc/620, F41, Theorie, jel: jel:E63, jel: jel:F41, jel: jel:F31, jel: jel:E52
Exchange rate peg, sovereign default, Kleine offene Volkswirtschaft, Exchange rate peg, interest rate policy, equilibrium determination, sovereign default, public debt, interest rate policy, 330, Equilibrium, Intertemporal insolvency, 310, Zinspolitik, public debt, Small open economy, info:eu-repo/classification/ddc/310, E52, Internationale Staatsschulden, Länderrisiko, F31, info:eu-repo/classification/ddc/330, ddc:330, equilibrium determination, 620, Flexibler Wechselkurs, Monetary policy options, E63, info:eu-repo/classification/ddc/620, F41, Theorie, jel: jel:E63, jel: jel:F41, jel: jel:F31, jel: jel:E52
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