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Essays on exchange rate, monetary and fiscal policies in dollarized economies
Descriptive
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Text
TitleInfo
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Title
Essays on exchange rate, monetary and fiscal policies in dollarized economies
Identifier
ETD_2641
Identifier
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http://hdl.rutgers.edu/1782.1/rucore10001600001.ETD.000053412
Language
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eng
Genre
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theses
Subject
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Topic
Economics
Subject
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(authority = ETD-LCSH)
Topic
Dollarization
Subject
(ID = SBJ-3);
(authority = ETD-LCSH)
Topic
Fiscal policy
Subject
(ID = SBJ-4);
(authority = ETD-LCSH)
Topic
Foreign exchange rates
Abstract
(type = abstract)
My dissertation has four chapters. I use dynamic stochastic general equilibrium (DSGE) models to study the welfare implications of exchange rate, monetary, and fiscal policies in de facto dollarized economies. Dollarization is a common phenomenon in emerging economies. In many of them economic agents hold liabilities in foreign currency while most income is earned in domestic currency. Thus, a sudden depreciation of the domestic currency may cause significant adverse effects on domestic agents' wealth and welfare. That is why governments try to design and implement macroeconomic policies that help reduce these adverse effects. My work aims at contributing to the design and implementation of these policies. In the first chapter, I study alternative exchange rate regimes in a dollarized economy. I develop a DSGE model and pursue Bayesian estimation using data from Singapore. The main conclusion is that the flexible exchange rate regime is better than the fixed exchange rate. In the second chapter, I work on an extension of my first chapter by introducing nontradable goods, which allows me to study a broader set of exchange rate regimes in a dollarized economy. I develop a DSGE model and pursue Bayesian estimation using data from Peru. The main conclusion is that a policy that pegs the domestic currency price of exports is better than a flexible exchange rate regime that targets the consumer price index, which in turn is better than the fixed exchange rate. The third chapter studies the optimal fiscal rule for a dollarized economy. Using a DSGE model with endogenous dollarization, I obtain that an optimal fiscal rule should take into account deviations (from their steady state values) of the level of government debt, government spending, and inflation. The fourth chapter characterizes the optimal exchange rate policy in a dollarized economy using a method developed by Devereux and Sutherland (2007, 2008). The method allows me to use a DSGE model in order to compute the optimal currency composition of the portfolio of (foreign) liabilities in the long-run equilibrium and its dynamics. The main finding is that the flexible exchange rate is better than the fixed rate.
PhysicalDescription
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electronic resource
Extent
xi, 190 p. : ill.
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Note
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Ph.D.
Note
Includes abstract
Note
Vita
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(type = bibliography)
Includes bibliographical references
Note
(type = statement of responsibility)
by Luis V. Palacios-Salguero
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Palacios-Salguero
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Luis
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author
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Luis Palacios-Salguero
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Chang
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Roberto
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Roberto Chang
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Bordo
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Michael
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Michael Bordo
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Mizrach
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Bruce
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Bruce Mizrach
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Sapriza
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Horacio
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Horacio Sapriza
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Rutgers University
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degree grantor
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Graduate School - New Brunswick
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school
OriginInfo
DateCreated
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2010
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2010
Place
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xx
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Title
Rutgers University Electronic Theses and Dissertations
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ETD
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Title
Graduate School - New Brunswick Electronic Theses and Dissertations
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rucore19991600001
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NjNbRU
Identifier
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doi:10.7282/T3154H4N
Genre
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ETD doctoral
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Rights
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The author owns the copyright to this work.
Copyright
Status
Copyright protected
Availability
Status
Open
Reason
Permission or license
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Name
FamilyName
Palacios-Salguero
GivenName
Luis
Role
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DateTime
2010-04-15 17:10:02
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Luis Palacios-Salguero
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Rutgers University. Graduate School - New Brunswick
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Author Agreement License
Detail
I hereby grant to the Rutgers University Libraries and to my school the non-exclusive right to archive, reproduce and distribute my thesis or dissertation, in whole or in part, and/or my abstract, in whole or in part, in and from an electronic format, subject to the release date subsequently stipulated in this submittal form and approved by my school. I represent and stipulate that the thesis or dissertation and its abstract are my original work, that they do not infringe or violate any rights of others, and that I make these grants as the sole owner of the rights to my thesis or dissertation and its abstract. I represent that I have obtained written permissions, when necessary, from the owner(s) of each third party copyrighted matter to be included in my thesis or dissertation and will supply copies of such upon request by my school. I acknowledge that RU ETD and my school will not distribute my thesis or dissertation or its abstract if, in their reasonable judgment, they believe all such rights have not been secured. I acknowledge that I retain ownership rights to the copyright of my work. I also retain the right to use all or part of this thesis or dissertation in future works, such as articles or books.
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2631680
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