Found 385 article(s) in category 'Monetary Policy'

The Currency-Plus-Commodity Basket: A Proposal for Exchange Rates in Oil-Exporting Countries to Accommodate Trade Shocks Automatically

The Currency-Plus-Commodity Basket: A Proposal for Exchange Rates in Oil-Exporting Countries to Accommodate Trade Shocks Automatically. Jeffrey Frankel, March 2017, Paper, “The paper proposes an exchange rate regime for oil-exporting countries. The goal is to achieve the best of both flexible and fixed exchange rates. The arrangement is designed to deliver monetary policy that counteracts rather than exacerbates the effects of swings in the oil market, while yet offering the day-to-day transparency and predictability of a currency peg. The proposal is to peg the national currency to a basket, but a basket that includes not only the currencies of major trading partners (in particular, the dollar and the euro), but also the export commodity (oil). The plan is called Currency-plus-Commodity Basket (CCB). The paper begins by fleshing out the need for an innovative arrangement that allows accommodation to trade shocks.Link

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Mnuchin’s Mission

Mnuchin’s Mission. Jeffrey Frankel, March 22, 2017, Opinion, “US Treasury Secretary Steven Mnuchin is hemmed in on all sides. Domestically, he’s trapped between the promises he has made (such as the “Mnuchin rule” that taxes wouldn’t be cut for the rich), the actions of President Donald Trump (whose tax plan includes cuts for the rich), and simple arithmetic (which makes the administration’s conflicting pledges impossible to fulfill). But even on the international stage, where US treasury secretaries typically enjoy more latitude and esteem, Mnuchin is likely to have a hard time.Link

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Defending Worldwide Taxation with a Shareholder-Based Definition of Corporate Residence

Defending Worldwide Taxation with a Shareholder-Based Definition of Corporate Residence. Stephen Shay, March 5, 2017, Paper, “This Article argues that a principled, efficient, and practical definition of corporate residence is necessary even if some form of corporate integration is adopted, and that such a definition is a key element in designing either a real worldwide or a territorial income tax system as well as a potential restraint on the inversion phenomenon. The Article proposes that the United States adopt a shareholder-based definition of corporate residence that is structured as follows:…Link

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Addicted to Dollars

Addicted to Dollars. Carmen Reinhart, March 1, 2017, Opinion, “Since the end of World War II, the United States’ share in world GDP has fallen from nearly 30% to about 18%. Other advanced economies have also experienced sustained declines in their respective slices of the global pie. But you wouldn’t know it from looking at the international monetary system.Link

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The Country Chronologies to Exchange Rate Arrangements into the 21st Century: Will the Anchor Currency Hold?

The Country Chronologies to Exchange Rate Arrangements into the 21st Century: Will the Anchor Currency Hold? Carmen Reinhart, Kenneth Rogoff, February 2017, Paper, “Detailed country-by-country chronologies are an informative companion piece to our paper “Exchange Arrangements Entering the 21st Century: Which Anchor Will Hold?,” which provides a comprehensive history of anchor or reference currencies, exchange rate arrangements, and a new measure of foreign exchange restrictions for 194 countries and territories over 1946-2016. The individual country chronologies are also a central component of our approach to classifying regimes. These country histories date dual or multiple exchange rate episodes, as well as to differentiate between pre-announced pegs, crawling pegs, and bands from their de facto counterparts. We think it is important to distinguish between say, de facto pegs or bands from announced pegs or bands, because their properties are potentially different. The chronologies also flag the dates for important turning points, such as when the exchange rate first floated, or when the anchor currency was changed. We extend our chronologies as far back as possible, even though we only classify regimes from 1946 onwards.Link

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The Truth About Blockchain

The Truth About Blockchain. Karim Lakhani, January/February 2017, Paper, “The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. With blockchain, this article can imagine a world in which contracts are embedded in digital code and stored in transparent, shared databases, where they are protected from deletion, tampering, and revision. In this world every agreement, every process, every task, and every payment would have a digital record and signature that could be identified, validated, stored, and shared. This is the immense potential of blockchain. Although this article shares the enthusiasm for its potential, it worries about the hype.Link

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Is the Deflation Cycle Over?

Is the Deflation Cycle Over? Carmen Reinhart, January 31, 2017, Opinion, “Until the global financial crisis of 2008-2009, deflation had all but disappeared as a concern for policymakers and investors in the advanced economies, apart from Japan, which has been subject to persistent downward pressure on prices for nearly a generation. And now deflationary fears are on the wane again.Link

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