Exchange rate regimes and macroeconomic stability : the case of Sweden 1972-1996
2000 (English)Report (Other academic)
In this paper I investigate the relevance of the exchange rate regime for macroeconomic stability. I simulate hypothetical macroeconomic developments under different regimes in Sweden during the period 1972 -1996. The main question is how stable output would have been if Sweden had had a floating exchange rate regime. Would it have been better with a floating exchange rate than the actual quasi-fixed regime? Also the development with an irrevocably fixed exchange rate is investigated. The results indicate that the central bank can stabilize much of the macroeconomic disturbances under a floating exchange rate, but still the volatility of the macroeconomic variables under the hypothetical floating exchange rate regime is about the same as under the actual quasi-fixed regime.
Place, publisher, year, edition, pages
Uppsala: Nationalekonomiska institutionen , 2000. , 35 p.
Working paper, ISSN 0284-2904
IdentifiersURN: urn:nbn:se:uu:diva-2503ISBN: 99-3412793-8OAI: oai:DiVA.org:uu-2503DiVA: diva2:128764