When pegging is a commitment device: Revisiting conventional wisdom about currency crises

• 成果类型: Article
• 署名作者: Tarashev, Nikola; Zabai, Anna
• 署名单位: Bank for International Settlements (BIS)
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2019.02.001
• 发表日期: 2019
• 页码: 233-247
• 关键词: currency crises; inflation bias; Intertemporal trade-offs; global games

摘要

Could a less conservative central bank, that is, one with a smaller aversion to inflation, be more likely to withstand pressure on its currency peg? Traditional currency-crisis models provide an unambiguous answer: No. We argue that this answer stems from the models' narrow focus on how a central bank's resistance to private-sector pressure affects output and inflation in the short run. The answer may reverse if pegging is a commitment device, serving to address domestic credibility issues in the long run by transferring the conduct of monetary policy abroad. As a less conservative central bank stands to benefit more from such a transfer, it should find a peg more valuable. (C) 2019 Elsevier B.V. All rights reserved.