This week's European Economic Experts Panel statements:
A) Under a fixed exchange rate and fully liberalized capital flows, a country loses domestic control of monetary policy.
B) For emerging and developing economies open to the world capital market, a flexible exchange rate confers little advantage over a pegged exchange rate in terms of economic stability.
C) The key feature making the US a more natural optimum currency area than the euro area is higher labor mobility.
Keyword: emerging markets
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This week's US Economic Experts Panel statements:
A) In an economy open to capital flows, monetary policy can only be effective with a floating exchange rate.
B) For emerging and developing economies open to the world capital market, a flexible exchange rate confers little advantage over a pegged exchange rate in terms of economic stability.
C) The key feature making the US a more natural optimum currency area than the euro area is higher labor mobility.
This week’s IGM Economic Experts Panel statement:
Experience over the past 30 years shows that for the typical emerging market nation facing rapid capital outflows, spending foreign currency reserves to defend its currency is a better policy for its citizens than not doing so.
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