Effects of External Shocks in an Open Economy and Exchange Rate Arrangements

Author: Sun Lijian
Publisher:
Publish Date: 2005-09-01
Features: The central idea of this book is that the exchange rate system arrangements in emerging market countries should first be based on a scientific exchange rate formation mechanism, while also considering whether the country's economic structure has the ability to withstand external shocks from trade and capital inflows. Only in this way can the formation and impact mechanisms of currency crises be correctly understood, an effective foreign exchange and capital management system can be established, a reasonable exchange rate system suitable for the country's economic development can be determined, and macroeconomic control policies can be implemented under this reasonable exchange rate arrangement, thereby enhancing the government's credibility and the country's economic development strength. This book takes an open economy as a premise and focuses on emerging market countries such as East Asia and China as the research subjects, examining how these countries determine exchange rate issues under multiple external shocks. The book is divided into five parts, with the author elaborating on five aspects: modern exchange rate theory systems, the role of nominal exchange rate changes in international trade, capital inflows and their impacts, currency crises and foreign exchange controls, and the selection of exchange rate systems. The author strives to stay at the forefront of both theory and practice on this issue. The book combines academic rigor, timeliness, and policy relevance.