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The cost of crises and learning to live with exchange rate volatility: evidence from survey measures of consumer and business expectations

de Brouwer, Gordon

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Conclusion: This paper has assessed the empirical relationship between exchange rate volatility and survey measures of household and business confidence in Australia, Japan, Korea, Malaysia, and Singapore. Caution needs to be used in interpreting this relationship, because the number of countries and observations is relatively small and because volatility may be a proxy for the effects of other factors and shocks on sentiment. But some tentative conclusions can be drawn. Business sentiment is...[Show more]

dc.contributor.authorde Brouwer, Gordon
dc.contributor.editorKawai, Masahiro
dc.date.accessioned2004-04-07
dc.date.accessioned2004-05-19T09:17:51Z
dc.date.accessioned2011-01-05T08:29:24Z
dc.date.available2004-05-19T09:17:51Z
dc.date.available2011-01-05T08:29:24Z
dc.date.created2003
dc.identifier.urihttp://hdl.handle.net/1885/40478
dc.identifier.urihttp://digitalcollections.anu.edu.au/handle/1885/40478
dc.description.abstractConclusion: This paper has assessed the empirical relationship between exchange rate volatility and survey measures of household and business confidence in Australia, Japan, Korea, Malaysia, and Singapore. Caution needs to be used in interpreting this relationship, because the number of countries and observations is relatively small and because volatility may be a proxy for the effects of other factors and shocks on sentiment. But some tentative conclusions can be drawn. Business sentiment is more sensitive than consumer sentiment to exchange rate volatility. Exchange rate volatility matters much more when there is a currency crisis than in ‘normal’ times: it seems that currency crises are much more damaging to confidence than is exchange rate volatility itself. Finally, there is some evidence that consumers and firms learn to live with exchange rate uncertainty in flexible rate regimes.
dc.format.extent596671 bytes
dc.format.extent353 bytes
dc.format.mimetypeapplication/pdf
dc.format.mimetypeapplication/octet-stream
dc.language.isoen_AU
dc.publisherRoutledge, London
dc.subjectexchange rate volatility
dc.subjectsurvey measures
dc.subjectconsumer business expectations
dc.subjecttrade
dc.subjectinvestment
dc.subjecteconomic growth
dc.subjectcurrency crises
dc.subjectflexible rate regimes
dc.titleThe cost of crises and learning to live with exchange rate volatility: evidence from survey measures of consumer and business expectations
dc.typeBook chapter
local.description.refereedyes
local.identifier.citationpages1-20
local.identifier.citationpublicationExchange rate regimes in East Asia
local.identifier.citationyear2003
local.identifier.eprintid2482
local.rights.ispublishedyes
local.title.chapter9
dc.date.issued2003
CollectionsANU Research Publications

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