The basket-peg, dollar-peg, and floating: A comparative analysis

Yoshino, Naoyuki; Kaji, Sahoko; Ayako, Suzuki

doi:10.1016/s0889-1583(03)00051-0

Cited by 40 publications

(43 citation statements)

References 3 publications

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“…Ito, Ogawa, and Sasaki (1998) and Ogawa and Ito (2002) find that a basket peg is desirable in a general equilibrium model that does not involve capital movements. Similarly, Yoshino, Kaji, and Suzuki (2004) and Yoshino, Kaji, and Asonuma (2004) confirm the optimality of a basket peg in a general equilibrium model with capital movements across economies.…”

Section: Literature Reviewmentioning

confidence: 70%

“…Ito, Ogawa, and Sasaki (1998) and Yoshino, Kaji, and Suzuki (2004) find that a basket peg is superior to a dollar regime for small open economies in East Asia.…”

Section: Static Analysis Of Exchange Rate Regimesmentioning

confidence: 99%

“…One important implication of Ito, Ogawa, and Sasaki (1998) and Yoshino, Kaji, and Suzuki (2004) emerges from Table 3 which reports simulation results for static analysis (over one period) in the case of Thailand: the country is better off adopting a basket peg than a dollar peg. A basket peg allows the monetary authorities to mitigate the negative impacts of the exogenous dollar-yen exchange rate fluctuation by choosing the optimal weights on exchange rate against the dollar and allowing both the dollar rate and the yen rate fluctuate in opposite directions.…”

Section: Figure 3: Policy Options In Static Analysismentioning

confidence: 99%

“…Moreover, in order to have our calibration results comparable across sections, the simulation exercises for each analysis use the same set of estimated parameters and shocks over the same time horizons for Thailand. Ogawa, and Sasaki (1998) consider the optimal basket peg regime under a partial equilibrium model that do not involve capital movements, while Yoshino, Kaji, and Suzuki (2004) explore the same issue under a general equilibrium model with capital movements across economies. The optimality of a basket peg is also confirmed in two interdependent economies in Ogawa and Ito (2002) and Yoshino, Kaji, and Asonuma (2004).…”

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confidence: 99%

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Comparison of Static and Dynamic Analyses on Exchange Rate Regimes in East Asia

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractThis paper compares three methods of analyzing exchange rate regimes in East Asia: static analysis, conventional dynamic analysis, and dynamic transition analysis. First we provide quantitative results that both estimated parameters for Thailand and time intervals are applied symmetrically across the three approaches. Our comparable simulation results illustrate how these three analyses are mutually related. Comparisons across the three methods demonstrate limitations of the static and conventional dynamic analyses where exchange rate regimes remain unchanged over the analysis horizon. Moreover, we emphasize three advantages of the dynamic transition analysis over the static and conventional dynamic analyses in that shifts from the current regime to alternative regimes are contrasted with a benchmark case of maintaining the current regime over the analysis horizon. JEL Classification: F33, F41, F42ADBI Working Paper 532 Yoshino, Kaji, and Asonuma

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Section: Literature Reviewmentioning

confidence: 70%

“…Ito, Ogawa, and Sasaki (1998) and Yoshino, Kaji, and Suzuki (2004) find that a basket peg is superior to a dollar regime for small open economies in East Asia.…”

Section: Static Analysis Of Exchange Rate Regimesmentioning

confidence: 99%

Section: Figure 3: Policy Options In Static Analysismentioning

confidence: 99%

mentioning

confidence: 99%

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Comparison of Static and Dynamic Analyses on Exchange Rate Regimes in East Asia

2015

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“…The macro model of the basket peg system have been already proposed. One of them argue that the best exchange rate regime depends on the policy goal [6]. This kind of research dealing with the design of the market system in the light of the policy is macroscopic research.…”

Section: Comparison With the Existing Researchmentioning

confidence: 99%

Building a Simulation Model of the Currency Basket Peg System

Kunitomo¹,

Iba

Takayasu

2006

Proceedings of the 9th Joint International Conference on Information Sciences (JCIS-06)

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This paper presents a institutional framework for the currency basket peg system. After the Asian currency crisis, the needs of seeking adaptive currency system has risen up but the best currency system has not still appeared. In this paper, we propose the model of "the currency basket peg system". This model realize the currency basket peg system on the computer. With using it, we investigate conditions that the currency basket peg system works.

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Research on multiscale features and integrated forecasting of the Belt and Road exchange rate index

Yixi

Liu

Li³

et al. 2020

Concurrency and Computation

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Massive progress and fruitful results have been achieved since the implementation of the Belt and Road Initiative (B&R). However, the risk of exchange rate between countries along the Belt and Road cannot be ignored. In this paper, we propose a B&R exchange rate index to evaluate the currency risk of countries along the B&R, along with a research on the multiscale features of the B&R exchange rate index and the effective RMB exchange rate index using the EMD algorithm. Then, we propose an integrated forecasting approach. We adopt the EMD algorithm and the Grey Relational Analysis to decompose and reconstruct the B&R exchange rate index and the effective RMB exchange rate index into three subsections with different volatility characteristics. The prediction outcome of the integrated model for the original series equals a sum of the Auto-regressive Integrated Moving Average model for trend term and the Long Short-Term Memory model for market fluctuation term as well as noise term. The results of our prediction demonstrate a much better performance of our proposed integrated forecasting model than pure methods. Lastly, several suggestions are put forward to help relevant enterprises effectively avoid and manage the exchange risks. K E Y W O R D S belt and road exchange rate index, EMD algorithm, integrated forecasting model, multiscale features 1 INTRODUCTION According to BELT AND ROAD PORTAL 1 , as of April 2019, China has signed 173 cooperation documents with 125 countries along the Belt and Road (B&R), expanding the scope from the Asia-Europe region originally to Africa, Latin America, South Pacific, Western Europe and other countries gradually. Besides, from 2013 to 2018, The total trade volume between China and regions along the route has exceeded 6 trillion U.S. dollars, according to the National Development and Reform Commission. In terms of the Ministry of commerce, 15.64 billion dollars has been invested by Chinese enterprises in non-financial direct investments in 56 countries along the B&R, up 8.9% year on year, taking up 13% of the total amount of investment over the same period; 7721 foreign contractual projects along the B&R have been newly signed, with a total value of 125.78 billion dollars; the total turnover was up to 89.33 billion dollars with a growth of 4.4% over the same period in 2017, which accounted for 52.8% of the total amount in 2018. However, the exchange rate fluctuations of currencies around the "Belt and Road" area are usually higher than that of mainstream currencies such as the U.S. dollar and the Euro. One reason is that the exchange rate systems of these countries are mainly soft pegged and floating, especially in Europe and Africa, which makes these countries' currencies more sensitive to the impact of uncertain market factors. Another reason is that the economic development in countries and regions along the B&R varies greatly, making the country risk relatively high. 1 https://eng.yidaiyilu.gov.cn/

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The basket-peg, dollar-peg, and floating: A comparative analysis

Cited by 40 publications

References 3 publications

Comparison of Static and Dynamic Analyses on Exchange Rate Regimes in East Asia

Comparison of Static and Dynamic Analyses on Exchange Rate Regimes in East Asia

Building a Simulation Model of the Currency Basket Peg System

Research on multiscale features and integrated forecasting of the Belt and Road exchange rate index

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