Why might the central bankers in emerging market economies focus more attention on a stable exchange...
Why might the central bankers in emerging market economies focus more attention on a stable exchange rate than say the Federal Reserve or the European Central Bank?
Homework Answers
For emerging market economies the level of imports and exports could represent a significantly large percentage of their total economy , and as a result unstable exchange rates could cause significant swings in the level of output and growth creating a large amount of systematic risk. In the U.S and Europe ,while the volume of international trade is large in absolute terms it is smaller percentage of the total economy . So the goal of stable exchange rates may be subordinated to other goals.
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Why might the central bankers in
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