xBookUtils.terms['fn_8_1'] = "Officially, all currencies in the ERM pegged to a basket of currencies called the ecu (European currency unit).";
xBookUtils.terms['fn_8_2'] = "All else would not have been equal under this shift, given the ERM; Germany’s interest rate increase would have been matched by other ERM members to preserve their pegs. For Germany, those shifts would be increases in the foreign interest rate (from Germany’s perspective), and those responses would, in turn, have shifted Germany’s IS curve a tiny bit farther to the right. These extra effects make no substantive difference to the analysis, so the extra shift is not shown here, for clarity.";
xBookUtils.terms['fn_8_3'] = "Interest rate responses in the ERM (described in footnote 2) would, in turn, have moved Germany’s IS curve out yet farther, requiring a bit more tightening from the Bundesbank. Again, these indirect effects do not affect the analysis and are not shown, for clarity.";
xBookUtils.terms['fn_8_4'] = "This is true in a pure two-country model, and, from the British perspective, Germany is the “rest of the world.” With many countries, however, the direction of change is still the same. All else equal, a British real depreciation against Germany will still imply a depreciation of the British real effective exchange rate against the rest of the world.";
xBookUtils.terms['fn_8_5'] = "Even the Liberal Democrats, for a long time pro-euro while just a small party perpetually in opposition, effectively dropped their stance once they had the opportunity to join a coalition government with the Conservatives in 2010.";
xBookUtils.terms['fn_8_6'] = "J. Ernesto López Córdova and Christopher M. Meissner, March 2003, “Exchange Rate Regimes and International Trade: Evidence from the Classical Gold Standard Era, 1870–1913,” American Economic Review, 93(1), 344–353; Antoni Estevadeordal, Brian Frantz, and Alan M. Taylor, May 2003, “The Rise and Fall of World Trade, 1870–1939,” Quarterly Journal of Economics, 118(2), 359–407; Marc Flandreau and Mathilde Maurel, January 2005, “Monetary Union, Trade Integration, and Business Cycles in 19th Century Europe,” Open Economies Review, 16(2), 135–152. The quotation is cited in an earlier draft of the paper by López Córdova and Meissner.";
xBookUtils.terms['fn_8_7'] = "Michael W. Klein and Jay C. Shambaugh, 2006, “Fixed Exchange Rates and Trade,” Journal of International Economics, 70(2), 359–383.";
xBookUtils.terms['fn_8_8'] = "Maurice Obstfeld and Alan M. Taylor, 1997, “Nonlinear Aspects of Goods-Market Arbitrage and Adjustment: Heckscher’s Commodity Points Revisited,” Journal of the Japanese and International Economies, 11(4), 441–479.";
xBookUtils.terms['fn_8_9'] = "Marcus Asplund and Richard Friberg, 2001, “The Law of One Price in Scandinavian Duty-Free Stores,” American Economic Review, 91(4), 1072–1083; Pinelopi Koujianou Goldberg and Frank Verboven, 2004, “Cross-Country Price Dispersion in the Euro Era: A Case Study of the European Car Market,” Economic Policy, 19(40), 483–521; Jean Imbs, Haroon Mumtaz, Morten O. Ravn, and Hélène Rey, 2010, “One TV, One Price?” Scandinavian Journal of Economics 112(4): 753–781.";
xBookUtils.terms['fn_8_10'] = "The correlation isn’t perfect for open pegs, nor is it zero for the other cases. This may not be surprising. Pegs are defined as fixed if they vary within a ±2% band. The band allows central banks a little flexibility with their exchange rates and interest rates that would be lacking in a strict peg (a band of zero width). As for nonpegs and closed countries, there may be reasons why their correlation with the base isn’t zero. For example, they may have inflation targets or other monetary policy guidelines that cause their interest rates to follow paths similar to those of the base country. In other words, these countries may be able to change their interest rates a great deal, but how much they choose to change them is another matter.";
xBookUtils.terms['fn_8_11'] = "Atish R. Ghosh, Anne-Marie Gulde, Jonathan D. Ostry, and Holger C. Wolf, 1997, “Does the Nominal Exchange Rate Regime Matter?” NBER Working Paper 5874.";
xBookUtils.terms['fn_8_12'] = "See, for example, Eduardo Levy-Yeyati and Federico Sturzenegger, September 2003, “To Float or to Fix: Evidence on the Impact of Exchange Rate Regimes on Growth,” American Economic Review, 93(4), 1173–1193; Kenneth Rogoff, Ashoka Mody, Nienke Oomes, Robin Brooks, and Aasim M. Husain, 2004, “Evolution and Performance of Exchange Rate Regimes,” IMF Occasional Paper 229, International Monetary Fund.";
xBookUtils.terms['fn_8_13'] = "Kenneth Rogoff, Ashoka Mody, Nienke Oomes, Robin Brooks, and Aasim M. Husain, 2004, “Evolution and Performance of Exchange Rate Regimes,” IMF Occasional Paper 229, International Monetary Fund.";
xBookUtils.terms['fn_8_14'] = "Michele Cavallo, Kate Kisselev, Fabrizio Perri, and Nouriel Roubini, “Exchange Rate Overshooting and the Costs of Floating,” Federal Reserve Bank of San Francisco Working Paper Series, Working Paper 2005–07, May 2005.";
xBookUtils.terms['fn_8_15'] = "Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza, 2005, “The Pain of Original Sin.” In Barry Eichengreen and Ricardo Hausmann, eds., Other People’s Money: Debt Denomination and Financial Instability in Emerging-Market Economies (Chicago: University of Chicago Press).";
xBookUtils.terms['fn_8_16'] = "Barry Eichengreen and Ricardo Hausmann, 2005, “Original Sin: The Road to Redemption.” In Barry Eichengreen and Ricardo Hausmann, eds., Other People’s Money: Debt Denomination and Financial Instability in Emerging-Market Economies (Chicago: University of Chicago Press); John D. Burger and Francis E. Warnock, 2003, “Diversification, Original Sin, and International Bond Portfolios,” International Finance Discussion Papers 755, Board of Governors of the Federal Reserve System (U.S.); Camilo E. Tovar, 2005, “International Government Debt Denominated in Local Currency: Recent Developments in Latin America,” BIS Quarterly Review, 109–118; Philip E. Lane and Jay C. Shambaugh, 2010, “Financial Exchange Rates and International Currency Exposures,” American Economic Review 100(1): 518–40.";
xBookUtils.terms['fn_8_17'] = "Ricardo Hausmann, Ugo Panizza, and Ernesto Stein, 2001, “Why Do Countries Float the Way They Float?” Journal of Development Economics, 66(2), 387–414; Christopher M. Meissner and Nienke Oomes, 2006, “Why Do Countries Peg the Way They Peg? The Determinants of Anchor Currency Choice,” Cambridge Working Papers in Economics 0643, Faculty of Economics, University of Cambridge.";
xBookUtils.terms['fn_8_18'] = "Eugene Canjels, Gauri Prakash-Canjels, and Alan M. Taylor, 2004, “Measuring Market Integration: Foreign Exchange Arbitrage and the Gold Standard, 1879–1913,” Review of Economics and Statistics, 86(4), 868–882.";
xBookUtils.terms['fn_8_19'] = "Barry Eichengreen, 1996, Globalizing Capital: A History of the International Monetary System (Princeton, NJ: Princeton University Press); Maurice Obstfeld and Alan M. Taylor, 2004, Global Capital Markets: Integration, Crisis, and Growth (Cambridge: Cambridge University Press).";
xBookUtils.terms['fn_8_20'] = "Lawrence Officer, October 1, 2001, “Gold Standard,” EH.Net Encyclopedia, edited by Robert Whaples, http://eh.net/encyclopedia/article/officer.gold.standard.";
xBookUtils.terms['fn_8_21'] = "Christopher M. Meissner, 2005, “A New World Order: Explaining the International Diffusion of the Gold Standard, 1870–1913,” Journal of International Economics, 66(2), 385–406.";
xBookUtils.terms['fn_8_22'] = "Reuven Glick and Alan M. Taylor, 2010, “Collateral Damage: Trade Disruption and the Economic Impact of War,” Review of Economics and Statistics, 92(1), 102–127; Antoni Estevadeordal, Brian Frantz, and Alan M. Taylor, 2003, “The Rise and Fall of World Trade, 1870–1939,” Quarterly Journal of Economics, 118(2), 359–407.";
xBookUtils.terms['fn_8_23'] = "Barry Eichengreen, 1992, Golden Fetters: The Gold Standard and the Great Depression (New York: Oxford University Press).";
xBookUtils.terms['fn_8_24'] = "World gold production more or less kept pace with output growth in the nineteenth century, but output grew much faster than gold stocks in the twentieth century. If gold gets scarcer, its relative price must rise. But if the money price of gold is pegged, the only way for the relative price of gold to rise is for all other prices to fall—that is, by economy-wide price deflation.";
xBookUtils.terms['fn_8_25'] = "Maurice Obstfeld and Alan M. Taylor, 2004, Global Capital Markets: Integration, Crisis, and Growth (Cambridge: Cambridge University Press). The output cost estimates are from page 143.";