Timothy J. Kehoe

Monetary Policy, Capital Flows, and Exchange Rates

Workshop on Monetary Policy in Developing Economies

Istanbul School of Central Banking

May 2014

Lectures

1. Exchange Rates and Monetary Policy

2. Capital Flows and Crises

Technical References

C. M. Betts and T. J. Kehoe, “Real Exchange Rate Movements and the Relative Price of Nontraded Goods,” Federal Reserve Bank of Minneapolis, 2008.

C. M. Betts and T. J. Kehoe, “Tradability of Goods and Real Exchange Rate Fluctuations,” Federal Reserve Bank of Minneapolis, 2001.

C. M. Betts and T. J. Kehoe, “U.S. Real Exchange Rate Fluctuations and Relative Price Fluctuations,” Journal of Monetary Economics, 53 (2006), 1297–1326.

H. L. Cole and T. J. Kehoe, “Self-Fulfilling Debt Crises,” Review of Economic Studies, 67 (2000), 91–116.

J. C. Conesa and T. J. Kehoe, “Gambling for Redemption and Self-Fulfilling Debt Crises,” Federal Reserve Bank of Minneapolis, 2012.

T. J. Kehoe and K. J. Ruhl, “Sudden Stops, Sectoral Reallocations, and the Real Exchange Rate,” Journal of Development Economics, 89 (2009), 235–249.

T. J. Kehoe, K. J. Ruhl, and J. B. Steinberg “Global Imbalances and Structural Change in the United States,” Federal Reserve Bank of Minneapolis, 2013.

Less Technical References

C. Arellano, J. C. Conesa, and T. J. Kehoe, “Chronic Sovereign Debt Crises in the Eurozone, 2010–2012,” Federal Reserve Bank of Minneapolis Economic Policy Paper 12-4, May 2012.

J. C. Conesa and T. J. Kehoe, “Is it Too Late to Bail Out the Troubled Countries in the Eurozone?” American Economic Review, Papers and Proceedings, forthcoming.

P. J. Kehoe and T. J. Kehoe, “What Happened in Mexico in 1994–95?” in P. J. Kehoe and T. J. Kehoe, editors, Modeling North American Economic Integration, Kluwer Academic Publishers, 1995, 131–147.

T. J. Kehoe, K. J. Ruhl and J. B. Steinberg, “What Will Happen When Foreigners Stop Lending to the United States?” Federal Reserve Bank of Minneapolis Economic Policy Paper 13-4, August 2013.

Classic References

C. M. Betts and M. B. Devereux, “Exchange Rate Dynamics in a Model of Pricing-to-Market,” Journal of International Economics, 50 (2000), 215–244.

V. V. Chari, P. J. Kehoe, and E. M. McGrattan, “Can Sticky Price Models Generate Volatile and Persistent Real Exchange Rates?” Review of Economic Studies, 69 (2002), 533–563.

C. Engel, “Accounting for U.S. Real Exchange Rate Changes,” Journal of Political Economy, 107 (1999), 507–538.

M. Mussa, “Nominal Exchange Rate Regimes and the Behavior of Real Exchange Rates: Evidence and Implications,” Carnegie-Rochester Conference Series on Public Policy, 25 (1986), 117–214

A.C. Stockman, “Real Exchange-Rate Variability under Pegged and Floating Nominal Exchange-Rate Systems: An Equilibrium Theory,” Carnegie-Rochester Conference Series on Public Policy, 29 (1988), 259–294

The lectures will focus on the readings in bold.

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