| Related pairs . | Key distinctions . |
|---|---|
| ERF versus ERT | In exchange rate fixes there is no separate autonomous foreign exchange market and the central bank is either a party to, or sets the terms of, every transaction; in exchange rate targeting there is an autonomous FX market in which agents are free to operate and the central bank intervenes from time to time |
| PERF vs AERF | In both, the central bank ‘fixes’ the exchange rate; in AERF but not in PERF, there are some other basic monetary policy instruments in use, typically aimed at other objectives |
| PERF or AERF vs PCB or ACB | In PCB or ACB (but not in PERF or AERF), all domestic currency is backed by foreign exchange reserves, which makes them more tightly regulated arrangements |
| AERF vs UD | In AERF, the central bank deploys some basic monetary instruments but the ‘fixing’ of the exchange rate is the centrepiece of policy; in USD, there may be some (temporary, varying) fixing or targeting of the exchange rate, but the authorities are concerned with other objectives and are deploying a (limited) range of monetary instruments for those purposes |
| PCB vs ACB | In PCB, there are no monetary policy instruments in use; in ACB, there are some basic instruments available and used |
| MDC vs UD | MDC represents a command economy, where the financial system is merely the counterpart of the planning process, whereas in UD there is some kind of autonomous banking system that is at least partly independent of any state planning mechanism, within a wider context of markets that may be severely distorted but still function as markets |
| UD vs LSD | In UD, the monetary policy instruments available are not effective (capable of producing the desired result) and the monetary policy objectives (with the trade-offs between them) are not clear; in LSD, either the instruments are not effective but the objectives are clear, or the instruments are effective but the objectives are not clear, or both of these are partly satisfied |
| LSD vs WSD | In WSD, the instruments are effective (which implies the existence of an interbank money market and a government securities market) and the objectives (with the trade-offs between them) are clear; in LSD, financial markets are less complete and instruments are less effective and/or objectives less clear |
| LSD vs mixed targeting | In LSD, the objectives are unclear, or at least unquantified, but in mixed targets (of whatever kind) the objectives are quantified and met |
| Related pairs . | Key distinctions . |
|---|---|
| ERF versus ERT | In exchange rate fixes there is no separate autonomous foreign exchange market and the central bank is either a party to, or sets the terms of, every transaction; in exchange rate targeting there is an autonomous FX market in which agents are free to operate and the central bank intervenes from time to time |
| PERF vs AERF | In both, the central bank ‘fixes’ the exchange rate; in AERF but not in PERF, there are some other basic monetary policy instruments in use, typically aimed at other objectives |
| PERF or AERF vs PCB or ACB | In PCB or ACB (but not in PERF or AERF), all domestic currency is backed by foreign exchange reserves, which makes them more tightly regulated arrangements |
| AERF vs UD | In AERF, the central bank deploys some basic monetary instruments but the ‘fixing’ of the exchange rate is the centrepiece of policy; in USD, there may be some (temporary, varying) fixing or targeting of the exchange rate, but the authorities are concerned with other objectives and are deploying a (limited) range of monetary instruments for those purposes |
| PCB vs ACB | In PCB, there are no monetary policy instruments in use; in ACB, there are some basic instruments available and used |
| MDC vs UD | MDC represents a command economy, where the financial system is merely the counterpart of the planning process, whereas in UD there is some kind of autonomous banking system that is at least partly independent of any state planning mechanism, within a wider context of markets that may be severely distorted but still function as markets |
| UD vs LSD | In UD, the monetary policy instruments available are not effective (capable of producing the desired result) and the monetary policy objectives (with the trade-offs between them) are not clear; in LSD, either the instruments are not effective but the objectives are clear, or the instruments are effective but the objectives are not clear, or both of these are partly satisfied |
| LSD vs WSD | In WSD, the instruments are effective (which implies the existence of an interbank money market and a government securities market) and the objectives (with the trade-offs between them) are clear; in LSD, financial markets are less complete and instruments are less effective and/or objectives less clear |
| LSD vs mixed targeting | In LSD, the objectives are unclear, or at least unquantified, but in mixed targets (of whatever kind) the objectives are quantified and met |
| Related pairs . | Key distinctions . |
|---|---|
| ERF versus ERT | In exchange rate fixes there is no separate autonomous foreign exchange market and the central bank is either a party to, or sets the terms of, every transaction; in exchange rate targeting there is an autonomous FX market in which agents are free to operate and the central bank intervenes from time to time |
| PERF vs AERF | In both, the central bank ‘fixes’ the exchange rate; in AERF but not in PERF, there are some other basic monetary policy instruments in use, typically aimed at other objectives |
| PERF or AERF vs PCB or ACB | In PCB or ACB (but not in PERF or AERF), all domestic currency is backed by foreign exchange reserves, which makes them more tightly regulated arrangements |
| AERF vs UD | In AERF, the central bank deploys some basic monetary instruments but the ‘fixing’ of the exchange rate is the centrepiece of policy; in USD, there may be some (temporary, varying) fixing or targeting of the exchange rate, but the authorities are concerned with other objectives and are deploying a (limited) range of monetary instruments for those purposes |
| PCB vs ACB | In PCB, there are no monetary policy instruments in use; in ACB, there are some basic instruments available and used |
| MDC vs UD | MDC represents a command economy, where the financial system is merely the counterpart of the planning process, whereas in UD there is some kind of autonomous banking system that is at least partly independent of any state planning mechanism, within a wider context of markets that may be severely distorted but still function as markets |
| UD vs LSD | In UD, the monetary policy instruments available are not effective (capable of producing the desired result) and the monetary policy objectives (with the trade-offs between them) are not clear; in LSD, either the instruments are not effective but the objectives are clear, or the instruments are effective but the objectives are not clear, or both of these are partly satisfied |
| LSD vs WSD | In WSD, the instruments are effective (which implies the existence of an interbank money market and a government securities market) and the objectives (with the trade-offs between them) are clear; in LSD, financial markets are less complete and instruments are less effective and/or objectives less clear |
| LSD vs mixed targeting | In LSD, the objectives are unclear, or at least unquantified, but in mixed targets (of whatever kind) the objectives are quantified and met |
| Related pairs . | Key distinctions . |
|---|---|
| ERF versus ERT | In exchange rate fixes there is no separate autonomous foreign exchange market and the central bank is either a party to, or sets the terms of, every transaction; in exchange rate targeting there is an autonomous FX market in which agents are free to operate and the central bank intervenes from time to time |
| PERF vs AERF | In both, the central bank ‘fixes’ the exchange rate; in AERF but not in PERF, there are some other basic monetary policy instruments in use, typically aimed at other objectives |
| PERF or AERF vs PCB or ACB | In PCB or ACB (but not in PERF or AERF), all domestic currency is backed by foreign exchange reserves, which makes them more tightly regulated arrangements |
| AERF vs UD | In AERF, the central bank deploys some basic monetary instruments but the ‘fixing’ of the exchange rate is the centrepiece of policy; in USD, there may be some (temporary, varying) fixing or targeting of the exchange rate, but the authorities are concerned with other objectives and are deploying a (limited) range of monetary instruments for those purposes |
| PCB vs ACB | In PCB, there are no monetary policy instruments in use; in ACB, there are some basic instruments available and used |
| MDC vs UD | MDC represents a command economy, where the financial system is merely the counterpart of the planning process, whereas in UD there is some kind of autonomous banking system that is at least partly independent of any state planning mechanism, within a wider context of markets that may be severely distorted but still function as markets |
| UD vs LSD | In UD, the monetary policy instruments available are not effective (capable of producing the desired result) and the monetary policy objectives (with the trade-offs between them) are not clear; in LSD, either the instruments are not effective but the objectives are clear, or the instruments are effective but the objectives are not clear, or both of these are partly satisfied |
| LSD vs WSD | In WSD, the instruments are effective (which implies the existence of an interbank money market and a government securities market) and the objectives (with the trade-offs between them) are clear; in LSD, financial markets are less complete and instruments are less effective and/or objectives less clear |
| LSD vs mixed targeting | In LSD, the objectives are unclear, or at least unquantified, but in mixed targets (of whatever kind) the objectives are quantified and met |
This PDF is available to Subscribers Only
View Article Abstract & Purchase OptionsFor full access to this pdf, sign in to an existing account, or purchase an annual subscription.
