Abstract

https://ssrn.com/abstract=2717690
 


 



Exchange Rates and Monetary Spillovers


Guillaume Plantin


University of Toulouse 1 - Toulouse School of Economics (TSE)

Hyun Song Shin


Bank for International Settlements; Princeton University - Department of Economics

January 2016

BIS Working Paper No. 537

Abstract:     
When does the combination of flexible exchange rates and domestic inflation-oriented monetary policy guarantee insulation from global financial conditions? We examine a dynamic global game model of international portfolio flows where, for some combination of parameters, the unique equilibrium exhibits the observed empirical feature that currency appreciation goes hand-in-hand with lower domestic interest rates and higher credit growth. When reversed, tighter monetary conditions go hand-in-hand with capital outflows and currency depreciation.

Number of Pages in PDF File: 43

Keywords: currency appreciation, capital flows, global games

JEL Classification: F32, F33, F34


Open PDF in Browser Download This Paper

Date posted: January 19, 2016  

Suggested Citation

Plantin, Guillaume and Shin, Hyun Song, Exchange Rates and Monetary Spillovers (January 2016). BIS Working Paper No. 537. Available at SSRN: https://ssrn.com/abstract=2717690

Contact Information

Guillaume Plantin (Contact Author)
University of Toulouse 1 - Toulouse School of Economics (TSE) ( email )
Place Anatole-France
Toulouse Cedex, F-31042
France
Hyun Song Shin
Bank for International Settlements ( email )
Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland
HOME PAGE: http://www.bis.org/author/hyun_song_shin.htm
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States

Feedback to SSRN


Paper statistics
Abstract Views: 271
Downloads: 74
Download Rank: 253,492