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Exchange Rate Management in an Era of Global Financial Crises with special reference to Australia

Author

Listed:
  • J.W. Nevile

    (School of Economics, The University of New South Wales)

  • Peter Kriesler

    (School of Economics, The University of New South Wales)

  • Geoff Harcourt

    (School of Economics, The University of New South Wales)

Abstract

Unless there is a radical reform of the global financial system, it will continue to be conducive to financial crises and the necessary reforms are looking increasingly unlikely. Government rhetoric and actions can often influence in desirable ways both the speculative actions that now determine the exchange rate and the effect of exchange rate movements on the domestic economy. Managing the exchange rate should start with Australian support for measures such as the Tobin tax which dampen speculation. In 2008 and 2009 exchange rate changes were helpful in reducing the impact of the global financial crisis Australia, largely because of a very clear commitment by the Australian government to make preservation of jobs its top priority. In 2009 a rapid rise in the exchange rate was unhelpful. In the short run little can be done about this but the longer run it is possible to offset the adverse effects.

Suggested Citation

  • J.W. Nevile & Peter Kriesler & Geoff Harcourt, 2011. "Exchange Rate Management in an Era of Global Financial Crises with special reference to Australia," Discussion Papers 2012-05, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2012-05
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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2012-05.pdf
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    References listed on IDEAS

    as
    1. Atkinson, A. B. (ed.), 2004. "New Sources of Development Finance," OUP Catalogue, Oxford University Press, number 9780199278565.
    2. Hyman P. Minsky, 1992. "The Financial Instability Hypothesis," Economics Working Paper Archive wp_74, Levy Economics Institute.
    3. Anna Cororaton & Richard Peach & Robert W. Rich, 2011. "How does slack influence inflation?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 17(June).
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    Cited by:

    1. Oyinbo, O. & Rekwot, G. Z., 2014. "Econometric Analysis of the Nexus of Exchange Rate Deregulation and Agricultural Share of Gross Domestic Product in Nigeria," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 6(1), pages 1-7.

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    More about this item

    Keywords

    exchange rates; global financial system; Tobin tax; speculation; macroeconomic policy.;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F30 - International Economics - - International Finance - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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