Description |
1 online resource (42 pages) |
Series |
IMF working paper ; no. 14/18 |
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IMF working paper ; no. 14/18.
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Contents |
Cover; Table of Contents; I. Introduction; II. The Model; A. Firms in the Traded (T) and Non-Traded (N) Good Sectors; B. Households; C. The Government; C.1. Fiscal Policy; D. The Central Bank; D.1. Exchange Rate Regimes and Reserve Accumulation Policies; D.2. Monetary and Sterilization Policies; E. The Balance of Payments; III. Calibration; Tables; Table 1. Calibration: Technology and Preference Parameters; Table 2. Calibration: Policy Parameters and Aid Process; IV. Simulation Results; A.A Flexible Exchange Rate Regime Versus A Fixed Regime: Are They Similar?; Figures |
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Figure 1. The Macroeconomic Effects of Aid Surges under a Flexible Exchange Rate Regime and a Fixed Regime Without SterilizationB. A Fixed Exchange Rate Regime: Sterilize Versus Don't Sterilize; Figure 2. The Macroeconomic Implications of Sterilization Policies in a Fixed Exchange Rate Regime; C. Fixed and Managed Float Regimes: The Role of Sterilization and Reserve Accumulation; Figure 3. A Comparison of the Macroeconomic Effects of a Fixed Exchange Rate Regime Versus the Effects of a Managed Float Regime with Full Reserve Accumulation |
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D.A Fixed Exchange Rate Regime: Closed Versus Open Capital AccountFigure 4. The Role of International Capital Mobility in a Fixed Exchange Rate Regime Without Sterilization; E. Welfare; Figure 5. Welfare Analysis; F. Discussion; V. Conclusions; Appendix; A. The Model in Detail; A.1. Firms; A.2. Households; A.3. The Government; A.4. The Central Bank; A.5. The Good Market Equilibrium Conditions; A.6. Definition of Equilibrium; References |
Summary |
We study the role of the exchange rate regime, reserve accumulation, and sterilization policies inthe macroeconomics of aid surges. Absent sterilization, a peg allows for almost full aid absorption? an increase in the current account deficit net of aid?delivering the same effects as those of a flexible regime but with a necessary increase in inflation. Regardless of the regime, policies that limit absorption?and result in large accumulation of reserves?are welfare reducing:they help reduce the real appreciation (and inflation under the peg), but at the expense of reducingprivate consumption an |
Bibliography |
Includes bibliographical references |
Notes |
Print version record |
Subject |
Foreign exchange rates -- Econometric models
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Foreign exchange reserves -- Econometric models
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Economic assistance -- Econometric models
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Economic assistance -- Econometric models
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Foreign exchange rates -- Econometric models
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Form |
Electronic book
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Author |
Portillo, Rafael, author
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Zanna, Luis-Felipe, author
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International Monetary Fund, issuing body.
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ISBN |
9781484397954 |
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1484397959 |
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9781484397008 |
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1484397002 |
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130645459X |
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9781306454599 |
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