Short-run independence of monetary policy under a pegged-exchange-rates system: An econometric approach

  • Laskar D
  • 3


    Mendeley users who have this article in their library.
  • 7


    Citations of this article.


In this paper we focus on the loss of independence of monetary policy due to the substitutability of domestic and foreign assets, and estimate it for seven main industrial countries under a Bretton Woods period. For that, we develop a structural model of the economy which includes the behavior of the monetary authorities and we consider three different estimates of independence of monetary policy. We find that when exchange rate expectations variables are left out of the equations, then the three estimates widely diverge, which emphasizes the error we can make if we just consider one type of estimate. On the other hand, when these variables are introduced in the model, the three estimates indicate that a large amount of independence exists. © 1982.

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

Cite this document

Choose a citation style from the tabs below

Save time finding and organizing research with Mendeley

Sign up for free