Economic activity, foreign exchange rate, and the interest rate during the Asian crisis Export

@article{citeulike:611279, abstract = {In a simple linear rational expectations model in which monetary authorities act to stabilize the exchange rate and also to mitigate adverse effects on real activity, a rise in interest rate is followed by exchange rate depreciation. In daily data across VAR and VECM models a rise in interest rate is associated with significant exchange rate depreciation for Thailand, the Philippines, and Korea. Depreciation and increases in the interest rate raise business failures that intensify crisis. Crisis management of the exchange rate must consider damaging effect of restrictive policy on financially constrained banking sector and non-financial firms.}, author = {Kim, Jung-Kwan and Ratti, Ronald A.}, citeulike-article-id = {611279}, citeulike-linkout-0 = {http://dx.doi.org/10.1016/j.jpolmod.2005.11.001}, citeulike-linkout-1 = {http://www.sciencedirect.com/science/article/B6V82-4JTRNB7-5/2/85471ab7024f3238afd0a295139d0c0c}, doi = {10.1016/j.jpolmod.2005.11.001}, journal = {Journal of Policy Modeling}, keywords = {finance, flow, fx, intervention, rates, reserves}, month = {May}, number = {4}, pages = {387--402}, posted-at = {2006-05-02 13:08:18}, priority = {2}, title = {Economic activity, foreign exchange rate, and the interest rate during the Asian crisis}, url = {http://dx.doi.org/10.1016/j.jpolmod.2005.11.001}, volume = {28}, year = {2006} }

TY - JOUR ID - citeulike:611279 L3 - citeulike-article-id:611279 N2 - In a simple linear rational expectations model in which monetary authorities act to stabilize the exchange rate and also to mitigate adverse effects on real activity, a rise in interest rate is followed by exchange rate depreciation. In daily data across VAR and VECM models a rise in interest rate is associated with significant exchange rate depreciation for Thailand, the Philippines, and Korea. Depreciation and increases in the interest rate raise business failures that intensify crisis. Crisis management of the exchange rate must consider damaging effect of restrictive policy on financially constrained banking sector and non-financial firms. IS - 4 JF - Journal of Policy Modeling EP - 402 TI - Economic activity, foreign exchange rate, and the interest rate during the Asian crisis VL - 28 SP - 387 KW - finance KW - flow KW - fx KW - intervention KW - rates KW - reserves AU - Kim, Jung-Kwan AU - Ratti, Ronald PY - 2006/05// UR - http://dx.doi.org/10.1016/j.jpolmod.2005.11.001 ER -