Hostname: page-component-848d4c4894-nr4z6 Total loading time: 0 Render date: 2024-05-28T19:00:00.541Z Has data issue: false hasContentIssue false
  • English
  • Français

Exchange rates and the macroeconomy in an era of global financial crises, with special reference to Australia

Published online by Cambridge University Press:  01 January 2023

Peter Kriesler ,
J W Nevile  and
G C Harcourt
Peter Kriesler*
Affiliation:
The University of New South Wales, Australia
J W Nevile
Affiliation:
The University of New South Wales, Australia
G C Harcourt
Affiliation:
The University of New South Wales, Australia
*
Peter Kriesler, School of Economics, The University of New South Wales, Sydney, NSW 2052, Australia. Email: p.kriesler@unsw.edu.au
Get access Rights & Permissions [Opens in a new window]

Abstract

Unless the global financial system is radically reformed – and the necessary reforms are looking increasingly unlikely to occur – it will continue to be conducive to financial crises. Government rhetoric and actions can often influence in desirable ways both the speculative actions that now determine the exchange rate and the effect of exchange rate movements on the domestic economy. Managing the exchange rate should start with Australian support for measures such as the Tobin tax that dampen speculation. In 2008 and 2009, exchange rate changes were helpful in reducing the impact of the global financial crisis on Australia, largely because of a very clear commitment by the Australian government to make preservation of jobs its top priority. In 2009, a rapid rise in the exchange rate was unhelpful. In the short run, little can be done about this, but in the longer run, it is possible to offset the adverse effects.

Keywords

E44E60F30F41Exchange ratesglobal financial systemmacroeconomic policyspeculationTobin tax
Type
Articles
Information
The Economic and Labour Relations Review , Volume 24 , Issue 1 , March 2013 , pp. 51 - 63
Copyright
Copyright © The Author(s) 2013

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Atkinson, A (ed.) (2004) New Sources of Development Finance. Oxford: Oxford University Press.Google Scholar
Bank for International Settlements (various years) Triennial Central Bank Survey. Available at: http://www.bis.org/search/?q=Triennial+Centrdal+Bank+Survey&adv=1 (accessed 12 November 2012).Google Scholar
Barro, RJ (1996) Inflation and growth. Federal Reserve Bank of St Louis Review 78(3): 153–169.Google Scholar
Brondolo, J (2011) Taxing financial transactions: an assessment of administrative feasibility. IMF Working Paper WP/11/185.CrossRefGoogle Scholar
Harcourt, GC (1994) Taming speculators and putting the world on course to prosperity: a “modest proposal”. Economic and Political Weekly 24(28): 2490–2492.Google Scholar
Harcourt, GC (1995) Capitalism, Socialism and Post-Keynesianism: Selected Essays of G.C. Harcourt. Cheltenham: Edward Elgar.Google Scholar
Harcourt, GC, Kriesler, P (2011) The enduring importance of The General Theory. Review of Political Economy 23(4): 503–519.CrossRefGoogle Scholar
Harvey, J (1999) Exchange rates. In: O’Hara, P (ed.) Encyclopedia of Political Economy, vol. 1. London/New York: Routledge, pp. 1198–1200.Google Scholar
Harvey, J (2001) Exchange rate theory and ‘The fundamentals’. Journal of Post Keynesian Economics 24(1): 3–15.Google Scholar
Harvey, J (2009) Currencies, Capital Flows and Crises: A Post-Keynesian Analysis of Exchange Rate Determination. London/New York: Routledge.CrossRefGoogle Scholar
Keynes, JM (1936) The General Theory of Employment, Interest and Money. London: Macmillan.Google Scholar
Kriesler, P, Lavoie, M (2007) The new consensus on monetary policy and its post-Keynesian critique. Review of Political Economy 19(3): 387–404.CrossRefGoogle Scholar
Kriesler, P, Nevile, JW (2009) A history of aggregate demand policy in Australia and lessons for Australia today. In: Wrightson, G (ed.) Labour Underutilisation: Unemployment and Underemployment Proceedings: Refereed Papers. Callaghan, NSW, Australia: University of Newcastle, pp. 158–168.Google Scholar
Langmore, J (2010) What’s not to like? Inside Story. Available at: http://inside.org.au/whats-not-to-like/ (accessed 22 September 2012).Google Scholar
Langmore, J (2011) A currency transaction tax. Global Social Policy 1: 9–11. Available at: http://www.ssps.unimelb.edu.au/__data/assets/pdf_file/0006/518523/Currency_Transaction_Tax.pdf (accessed 1 December 2012).Google Scholar
Mahbub ul Haq, , Kaul, I, Grunberg, I (eds) (1996) The Tobin Tax: Coping with Financial Volatility. New York/London: Oxford University Press.Google Scholar
Minsky, H (1985) The financial instability hypothesis: a restatement. In: Arestis, P, Skouras, T (eds) Post-Keynesian Economic Theory. Brighton: Wheatsheaf, pp. 24–55.Google Scholar
Nevile, J, Kriesler, P (2008) Expectations and unemployment. In: Wray, LR, Forstater, M (eds) Keynes and Macroeconomics after 70 Years. Cheltenham: Edward Elgar, pp. 309–320.Google Scholar
Peach, R, Rich, R, Cororaton, A (2011) How does slack influence inflation? Federal Reserve Bank of New York. Economics and Finance 17(3): 1–7.Google Scholar
Quiggin, J (2010) Zombie Economics: How Dead Ideas Still Walk among Us. Princeton, NJ: Princeton University Press.Google Scholar
Reserve Bank of Australia (various years) Bulletin. Available at: http://www.rba.gov.au/publications/bulletin/ (accessed 1 December 2012).Google Scholar
Stanley, TD (2004) Does unemployment hysteresis falsify the natural rate hypothesis? A meta-regression analysis. Journal of Economic Surveys 18(4): 589–612.CrossRefGoogle Scholar
Stanley, TD (2005) Integrating the empirical tests of the natural rate hypothesis: a meta-regression analysis. Kyklos 58(4): 611–634.Google Scholar
Taylor, L (2004) Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream. Cambridge, MA: Harvard University Press.Google Scholar
Taylor, L (2010) Maynard’s Revenge: The Collapse of Free Market Macroeconomics. Cambridge, MA: Harvard University Press.Google Scholar
United Nations (UN) (2000) Preparatory committee for the special session of the general assembly. In: World Summit for Social Development and Beyond, 17 March, A/AC.253/24, seminar on values and market economies, Annex.Google Scholar
Williams, R (2010) Foreword. In: Williams, R, Elliot, L (eds) Crisis and Recovery: Ethics, Economics and Justice. Basingstoke: Palgrave Macmillan, pp. x–xiii.Google Scholar