THÔNG TIN TÀI LIỆU
CHAPTER 20 The International Financial System 543 market constrains central bankers from pursuing overly expansionary monetary policy and constrains politicians from putting pressure on the central bank to engage in overly expansionary monetary policy, fear of exchange-rate depreciations can make overly expansionary monetary policy, and the time-inconsistency problem, less likely The need for signals from the foreign exchange market may be even more acute for emerging-market countries, because the balance sheets and actions of their central banks are not as transparent as they are in industrialized countries Targeting the exchange rate can make it even harder to ascertain a central bank s policy actions The public is less able to keep watch on the central bank and the politicians pressuring it, which makes it easier for monetary policy to become too expansionary When Is Exchange-Rate Targeting Desirable for Industrialized Countries? Given the above disadvantages with exchange-rate targeting, when might it be an appropriate strategy? In industrialized countries, the biggest cost to exchange-rate targeting is the loss of an independent monetary policy to deal with domestic considerations If an independent, domestic monetary policy can be conducted responsibly, this can be a serious cost indeed, as the comparison between the post-1992 experiences of France and the United Kingdom indicates However, not all industrialized countries have found that they are capable of conducting their own monetary policy successfully, either because the central bank is not independent or because political pressures on the central bank lead to an inflationary bias in monetary policy In these cases, giving up independent control of domestic monetary policy may not be a great loss, while the gain of having monetary policy determined by a better-performing central bank in the anchor country can be substantial Italy provides an example: It was not a coincidence that the Italian public had the most favourable attitude of all those in Europe toward the European Monetary Union The past record of Italian monetary policy was not good, and the Italian public recognized that having monetary policy controlled by more responsible outsiders had benefits that far outweighed the costs of losing the ability to focus monetary policy on domestic considerations A second reason why industrialized countries might find targeting exchange rates useful is that it encourages integration of the domestic economy with its neighbours Clearly, this was the rationale for long-standing pegging of the exchange rate to the deutsche mark by countries such as Austria and the Netherlands, and the more recent exchange-rate pegs that preceded the European Monetary Union To sum up, exchange-rate targeting for industrialized countries is probably not the best monetary policy strategy to control the overall economy unless (1) domestic monetary and political institutions are not conducive to good monetary policymaking or (2) there are other important benefits of an exchange-rate target that have nothing to with monetary policy When Is Exchange-Rate Targeting Desirable for EmergingMarket Countries? In countries in which political and monetary institutions are particularly weak and which therefore have been experiencing continued bouts of hyperinflation, a characterization that applies to many emerging-market (including transition) countries, exchange-rate targeting may be the only way to break inflationary psychology and stabilize the economy In this situation, exchange-rate targeting is the stabilization policy of last resort However, if the exchange-rate targeting regimes in emergingmarket countries are not always transparent, they are more likely to break down, often resulting in disastrous financial crises
Ngày đăng: 26/10/2022, 08:55
Xem thêm: