Monetary Regime Choices for a Semi-Open Country

摘要: This paper considers regime choices facing relatively small, trade-oriented, financially liberalizing, rapidly growing countries such as the East Asian NICs. The classic question of fixed versus flexible exchange rates is considered first. Of many factors that determine whether advantages justify loss monetary independence, all depend on openness country. One example advantage stable promote trade; magnitude this effect estimated in paper. Another a rate can serve nominal anchor to policy. second half reviews recent literature rules discretion, and then four alternative candidates for policy: money supply, GNP, price level, rate. It argued GNP dominates supply general, other two under certain conditions.