Gabriela Basurto - Academia.edu (original) (raw)
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Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thail... more Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thailand) raised doubts about the efficacy of increasing interest rates to defend the currency. Using a standard monetary model of exchange rate determination, this paper shows that tighter monetary policy was in fact associated with an appreciation of the exchange rate in these countries and during the Mexican currency crisis. Moreover, there is little evidence of higher real interest rates contributing to a widening of the risk premium. [JEL F31, G15, E40] O ne of the more controversial elements of the stabilization programs in the East Asian crisis countries (Indonesia, Korea, and Thailand) was the stance of monetary policy. With the sharp exchange rate depreciations experienced at the onset of the crisis, standard policy prescriptions called for an immediate tightening of monetary policy.
Abstract Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, ... more Abstract Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thailand) raised doubts about the efficacy of increasing interest rates to defend the currency. Using a standard monetary model of exchange rate deterrniriation, this ...
Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thail... more Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thailand) raised doubts about the efficacy of increasing interest rates to defend the currency. Using a standard monetary model of exchange rate determination, this paper shows that tighter monetary policy was in fact associated with an appreciation of the exchange rate in these countries and during the Mexican currency crisis. Moreover, there is little evidence of higher real interest rates contributing to a widening of the risk premium. [JEL F31, G15, E40] O ne of the more controversial elements of the stabilization programs in the East Asian crisis countries (Indonesia, Korea, and Thailand) was the stance of monetary policy. With the sharp exchange rate depreciations experienced at the onset of the crisis, standard policy prescriptions called for an immediate tightening of monetary policy.
Abstract Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, ... more Abstract Sharp exchange rate depreciations in the East Asian crisis countries (Indonesia, Korea, and Thailand) raised doubts about the efficacy of increasing interest rates to defend the currency. Using a standard monetary model of exchange rate deterrniriation, this ...