The Sung and Ming paper monies: currency competition and currency bubbles

Article Abstract:

The Ming dynasty (1368-1644) abandoned the paper money system established by the Sung dynasty (960-1279) due to inflation problems caused by over-issuance. It was driven to do so by competition from metallic currencies which raised 'interest elasticity of paper money demand.' This is proven using the Cagan adaptive expectations model and the money-in-utility model. Likewise, the Southern Sung government's dependence on a leaning-with-the-wind feedback approach to prevent self-generating inflation is discussed.

China, History, Chinese history, Paper money

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Monetary policy as a decision-making hierarchy: the case of Taiwan

Article Abstract:

The asymmetric reaction function of Taiwan's central bank was characterized via a threshold autoregressive model to determine its enforcement of its policy objectives under varying inflation rates. Specifically, four reaction functions to four inflation regimes were derived. These covered periods of no inflation, low inflation, moderate inflation and high inflation. The results showed that the central bank's responses were consistent with its publicly-announced goals of price stability.

Taiwan, Economic policy, Central banks

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Complex dynamics of the real exchange rate in an open macroeconomic model

Article Abstract:

The behavior of the real exchange rate in the context of a nonlinear discrete-time economic system was investigated. An open-economy macroeconomic framework was adopted for the study. Real exchange rate exhibited complex dynamic behavior when the Marshall-Lerner condition was not fulfilled under the assumption that domestic prices were freely flexible. In addition, the low degree of capital mobility contributed to the complexity of the dynamics.

Foreign Currency Management, Models, Usage, Prices and rates, Foreign exchange, Foreign exchange rates, Discrete-time systems, Discrete time systems

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