The Leading eBooks Store Online 4,272,009 members ⚫ 1,419,367 ebooks

New to eBooks.com?

Learn more

Monetary Policy Rules for Managing Aid Surges in Africa

Monetary Policy Rules for Managing Aid Surges in Africa by Edward F. Buffie
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
Since the turn of the century, aid flows to Africa have increased on average and become more volatile. As a result, policymakers, particularly in post-stabilization countries where inflation has only recently been brought under control, have been increasingly preoccupied with how best to deploy the available instruments of monetary policy without yielding on hard-won inflation gains. We use a stochastic simulation model, in which private sector currency substitution effects play a central role, to examine the properties of alternative monetary and fiscal policy strategies in the face of volatile aid flows. We show that simple monetary rules, specifically an (unsterilized) exchange rate crawl and a 'reserve buffer plus float'-under which the authorities set a time-varying reserve target corresponding to the unspent portion of aid financing and allow the exchange rate to float freely once this reserve target is satisfied-have attractive properties relative to a range of alternative strategies including those involving heavy reliance on bond sterilization or a commitment to a 'pure' exchange rate float.
International Monetary Fund; July 2007
40 pages; ISBN 9781452771304
Read online, or download in secure EPUB or secure PDF format
Title: Monetary Policy Rules for Managing Aid Surges in Africa
Author: Edward F. Buffie; Stephen A. O'Connell; Catherine A. Pattillo; Christopher Adam
 
ISBNs
1451911971
9781451867442
9781451911978
9781452771304