Exogenous and endogenous sterilisation under managed exchange rates

Title: Exogenous and endogenous sterilisation under managed exchange rates
Creator: Pantelopoulos, George
Relation: Review of International Economics Vol. 29, Issue 4, p. 756-779
Publisher Link: http://dx.doi.org/10.1111/roie.12497
Publisher: Wiley-Blackwell
Resource Type: journal article
Date: 2021
Description: One of the most widely debated aspects of international macroeconomics surrounds the efficacy of Central Bank sterilisation. However, ‘exogenous’ sterilisation initiatives by the Central Bank are involuntary if policymakers are to achieve a policy rate objective. Also, in many instances any excess liquidity is able to be sterilised ‘endogenously’ by commercial banks. To demonstrate both forms of sterilisation, this paper employs several structural VAR models. We show that (a) both exogenous and endogenous sterilisation initiatives are more or less involuntary, (b) the impossible trinity can be challenged and (c) why imbalances across the international monetary system can occur and persist.
Subject: sterilisation; exogenous; endogenous; international
Identifier: http://hdl.handle.net/1959.13/1475480
Identifier: uon:49566
Identifier: ISSN:0965-7576
Language: eng
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