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Should small open economies peg the currency to export prices?
Nominal GDP targeting makes a lot of sense for large currency areas like the US or the euro zone and it make sense that the central bank can implement a NGDP target through open market operations or as...
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PEP, NGDPLT and (how to avoid) Russian monetary policy failure
I am sitting in Riga airport and writing this. I have an early (too early!) flight to Stockholm. I must admit it makes it slightly more fun to sit in an airport when you can do a bit of blogging....
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“The Bacon Standard” (the PIG PEG) would have saved Denmark from the Great...
Even though I am a Danish economist I am certainly no expert on the Danish economy and I have certainly not spend much time blogging about the Danish economy and I have no plans to change that in the...
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Exchange rates are not truly floating when we target inflation
There is a couple of topics that have been on my mind lately and they have made me want to write this post. In the post I will claim that inflation targeting is a soft-version of what economists have...
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International monetary disorder – how policy mistakes turned the crisis into...
Most Market Monetarist bloggers have a fairly US centric perspective (and from time to time a euro zone focus). I have however from I started blogging promised to cover non-US monetary issues. It is...
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Next stop Moscow
I am writing this as I am flying to Moscow to spend a couple of days meeting clients in Moscow. It will be nice to be back. A lot of things are happing in Russia at the moment – especially politically....
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Jeff Frankel restates his support for NGDP targeting
It is no secret that I have been fascinated by some of Havard professor Jeff Frankel’s ideas especially his idea for Emerging Markets commodity exporters to peg the currency to the price of their main...
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Malaysia should peg the renggit to the price of rubber and natural gas
The Christensen family arrived in Malaysia yesterday. It is vacation time! So since I am in Malaysia I was thinking I would write a small piece on Malaysian monetary policy, but frankly speaking I...
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A modest proposal for post-Chavez monetary reform in Venezuela
Let’s just say it as it is – I was very positively surprised by the massive response to my post on the economic legacy of Hugo Chavez. However, as somebody who primarily wants to blog about monetary...
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Russia’s slowdown – another domestic demand story
Today I am in to Moscow to do a presentation on the Russian economy. It will be yet another chance to tell one of my pet-stories and that is that growth in nominal GDP in Russia is basically determined...
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Angola should adopt an ‘Export-Price-Norm’ to escape the ‘China shock’
It might be a surprise to most people but one of the fastest growing economies in the world over the last 10-15 years has been Angola. A combination of structural reforms and a commodity boom have...
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PBoC governor Zhou Xiaochuan should give Jeff Frankel a call (he is welcome...
Jeffrey Frankel of course is a long-term advocate of NGDP targeting, but recently he has started to advocate that if central banks continue to target inflation then they should target producer prices...
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Recession time for Russia – the ultra wonkish version
I have long been a proponent of what I have called the Export Price Norm (EPN). The idea with EPN is that commodity exporting countries can ensure stable nominal spending growth by pegging their...
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Kwanza devaluation is the right decision, but fundamental regime change is...
This is from Reuters: Angola’s central bank devalued the kwanza currency by about 6 percent against the dollar, a statement showed, a move analysts said was aimed at stimulating foreign currency...
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The ‘Dollar Bloc’ continues to fall apart – Azerbaijan floats the Manat
I have for sometime argued that the quasi-currency union ‘Dollar Bloc’ is not an Optimal Currency Area and that it therefore is doomed to fall apart. The latest ‘member’ of the ‘Dollar Bloc’ left...
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Oil exporters do not devalue to boost exports, but to stabilize public finances
Yesterday Azerbaijan’s central bank gave up its pegged exchange rate regime and floated the Manat. The Manat plummeted immediately and was essentially halved in value in yesterday’s trading. Azerbaijan...
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‘Currency instability’ should NOT be a concern for Canada
The commodity currencies of the world continues to take a beating on the back of the sharp drop in oil prices. This is now causing some to fear “currency instability”. Just these this story from...
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