Exchange Rate Management in an Era of Global Financial Crises with Special Reference to Australia

20 Pages Posted: 6 Feb 2012 Last revised: 30 Aug 2012

See all articles by John Nevile

John Nevile

UNSW Australia Business School, School of Economics

Peter Kriesler

UNSW Australia Business School, School of Economics

G.C. Harcourt

UNSW Australia Business School, School of Economics

Date Written: December 17, 2011

Abstract

Unless there is a radical reform of the global financial system, it will continue to be conducive to financial crises and the necessary reforms are looking increasingly unlikely. Government rhetoric and actions can often influence in desirable ways both the speculative actions that now determine the exchange rate and the effect of exchange rate movements on the domestic economy. Managing the exchange rate should start with Australian support for measures such as the Tobin tax which dampen speculation. In 2008 and 2009 exchange rate changes were helpful in reducing the impact of the global financial crisis Australia, largely because of a very clear commitment by the Australian government to make preservation of jobs its top priority. In 2009 a rapid rise in the exchange rate was unhelpful. In the short run.

Keywords: exchange rates, global financial system, Tobin tax, speculation, macroeconomic policy

JEL Classification: E44, E60, F30, F41

Suggested Citation

Nevile, John and Kriesler, Peter and Harcourt, G.C., Exchange Rate Management in an Era of Global Financial Crises with Special Reference to Australia (December 17, 2011). UNSW Australian School of Business Research Paper No. 2012ECON05, Available at SSRN: https://ssrn.com/abstract=1984373 or http://dx.doi.org/10.2139/ssrn.1984373

John Nevile

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

Peter Kriesler (Contact Author)

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

G.C. Harcourt

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

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