xBookUtils.terms['fn_4_1'] = "Data for this example are taken from the Bank of Canada and U.S. Bureau of Labor Statistics.";
xBookUtils.terms['fn_4_2'] = "Recall that the previous chapter also showed us how real interest parity can be used to solve for the long-run nominal interest rate i in each country, the so-called neutral level of the nominal interest rate. For example, restricting our attention to the case of a stable long-run inflation rate (e.g., under nominal anchoring in which an announced inflation target is expected to be hit in each country), we have ";
xBookUtils.terms['fn_4_3'] = "Andrew K. Rose, 2007, “A Stable International Monetary System Emerges: Inflation Targeting Is Bretton Woods, Reversed,” Journal of International Money and Finance, 26(5), 663–681.";
xBookUtils.terms['fn_4_4'] = "The actual arrangement is a “narrow band” centered on 7.46038 DKr/€ and officially of width ±2.25%, according to the ERM arrangement between Denmark and the Eurozone that has been in effect since 1999. In practice, the peg is much tighter and krone usually stays within ±0.5% of the central rate.";
xBookUtils.terms['fn_4_5'] = "A definition: “Trilemma noun 1. a quandary posed by three alternative courses of action” (Collins English Dictionary online).";
xBookUtils.terms['fn_4_6'] = "This correlation was noted by Wesley Mitchell in 1903, (A History of the Greenbacks; Chicago: University of Chicago Press). For recent econometric studies that examine this phenomenon, see George T. McCandless, Jr., 1996, “Money, Expectations, and U.S. Civil War,” American Economic Review, 86(3), 661–671; and Kristen L. Willard, Timothy W. Guinnane, and Harvey S. Rosen, 1996, “Turning Points in the Civil War: Views from the Greenback Market,” American Economic Review, 86(4), 1001–1018.";
xBookUtils.terms['fn_4_7'] = "This case study draws on Mervyn King, May 2004, “The Institutions of Monetary Policy,” American Economic Review, 94(2), 1–13.";
xBookUtils.terms['fn_4_8'] = "The notes were printed in Britain using plates of Swiss manufacture. The Kurds issued no new notes of their own; indeed, they had no means to do so and simply used this legacy currency after 1991. No new Swiss dinars were issued after 1989 in the South either.";
xBookUtils.terms['fn_4_9'] = "Once economic sanctions were imposed after the 1991 war, Baghdad had no access to the high-security technology and papers used to make modern banknotes. Instead, the Swiss dinar was retired, and the Saddam regime issued new legal tender notes in a form that it could print by using low-technology offset litho techniques that your local printer might use. These were the so-called Saddam or print dinars. Circulation of these notes exploded: a large volume of notes were printed by the Iraqi Central Bank and counterfeits added to this number. For these reasons, the northern currency, the Swiss dinar, was much more stable in the 1990s than the Saddam dinar.";
xBookUtils.terms['fn_4_10'] = "Under this reform, all the Swiss and Saddam notes were retired and a newly designed, secure currency for Iraq was brought into circulation nationally. As long as this currency reform was seen as credible, and the market believed it would successfully take place, the market rate would have to converge to the fixed rate set in advance by the authorities for note replacement. As the reform date approached, this convergence occurred, except for what appears to be a small “forgery risk premium” on the Saddam notes—detecting a fake among these notes was by no means simple.";