Fixed ER and ER crises 0.0 / 5 ? EconomicsInternational EconomicsUniversityAll boards Created by: luctustainCreated on: 10-01-18 21:05 Benefits of fixed ER system (1) Reduce uncertainty, +trade +investment 1 of 6 Benefits of fixed ER system (2) Make exports more competitive (change in q temporary, slow adjustment) 2 of 6 Benefits of fixed ER system (3) Import credibility of foreign CB, govt. irresponsible fiscal policy 3 of 6 Benefits of fixed ER system (4) Quick reduction in inflation (Brazil, Argentina) 4 of 6 Anchor country: Responsible monetary policy, low domestic inflation 5 of 6 Net worth of CB = 0, ... Assets = Liabilities 6 of 6
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