IMF research highlights limits of exchange rate flexibility
New dataset sheds light on role of dominant-currency invoicing for exchange rate dynamics
The dominance of the US dollar as the currency of choice for trade invoicing worldwide can dampen the benefits of exchange rate flexibility, new research published by the International Monetary Fund shows.
In contrast to standard macroeconomic theory, an exchange rate depreciation would not necessarily generate a large “spurt” in exports, said IMF chief economist Gita Gopinath during a webinar presenting the results. Such an export boost was “something you just don’t see for many countries, in
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