The world's leading economic powers must cooperate more to combat the health and economic shocks resulting from the COVID-19 pandemic. In a new free eBook, PIIE Briefing, How the G20 can hasten recovery from COVID-19, Peterson Institute experts outline how collective action by the Group of Twenty (G20) nations can make a difference. The PIIE agenda includes removal of trade barriers impeding the flow of medical supplies and food, and more money for research, testing, and disease control, especially for debt-burdened low-income countries. The World Bank and the World Health Organization need more resources to relieve suffering, and the International Monetary Fund must step up to stabilize the world financial system.

Exchange rate is the price of one country's currency in terms of another and it is a key macroeconomic factor that affects a country's international trade. Volatile exchange rate is a major concern for policymakers and not desirable as it makes international trade and investment decision more difficult due to exchange rate risk. This paper adopts an MGARCH model to explore the impact of COVID-19 cases on the volatility of the USD exchange rates against the local currencies of Bangladesh (BDT), India (INR), and Pakistan (PKR) where the prices of oil and gold are taken as control variables. The empirical investigation reveals a positive and significant effect of COVID-19 cases on the volatility of the USD exchange rate against BDT, INR, and PKR. Additionally, this paper forecasts the daily volatility of the USD exchange rate concerning all three currencies.

This book provides an empirical analysis of economic and political structures impacting the CFA franc zone. Concise and practical chapters explore the history of the CFA franc zone, challenges to development, geopolitical issues, the importance of flexible exchanges rates, growth trends, and the impact of the Covid crisis. Policy reform is examined to detail economic approaches that could reduce poverty and increase the quality of life within the area. This book aims to present a macroeconomic and exchange rate framework to promote development and post-Covid recovery within the CFA franc zone. It will be of interest to students, researchers, and policymakers involved in African economics, the political economy, and development economics.

Guillermo Calvo, who foresaw the financial crisis that followed the devaluationn of Mexico's peso, has spent much of his career thinking beyond the conventional wisdom. In a quiet and understated way, Calvo has made seminal contributions to several major research areas in macroeconomics, particularly monetary policy, exchange rates, public debt, and stabilization in Latin America and post-communist countries. Money, Exchange Rates, and Output brings together these contributions in a broad selection of the author's work over the past two decades. There are introductions to each section, and an introduction to the entire collection that outlines the connections throughout and survey the current state of macroeconomic theory. Specific issues covered are predetermined exchange rates, currency substitution, domestic public debt and seigniorage, and stabilizing transition economics.

This paper estimates the effects of nine exchange rates for european coun- tries vis-a-vis the Euro in the COVID pandemic. Using data on COVID cases, three containment and two stabilization measures relative to the euro area counterparts, it is shown that a more severe spread of the virus leads to a depreciation of the domestic currency. The same holds with respect to stricter movement restrictions, health care measures and more supportive monetary policies. More expansionary fiscal policies by the domestic country on the other hand lead to an appreciation of the currency. Two extensions show that the results differ with respect to whether the country is a scandinavian or eastern european country and whether the euro area countries or the other european countries introduce the measures.

Over the 21st century, and especially since 2014, global exchange rate volatility has been trending downwards, notably among the core G3 currencies (dollar, euro and the yen), and to some extent the G4 (including China). This stability continued through the Covid-19 recession to date: unusual, as exchange volatility generally rises in US recessions. Compared to measures of stock price volatility, exchange rate volatility rivals the lows reached in the heyday of Bretton Woods I. This paper argues that the core driver is convergence in monetary policy, reflected in a sharp-reduction of inflation and short- and especially long-term interest rate differentials. This unprecedented stability, which partially extends to emerging markets, is strongly reinforced by expectations that the zero bound will be significantly binding for advanced economies for years to come. We consider various hypotheses and suggest that the shutdown of monetary volatility is the leading explanation. The concluding part of the paper cautions that systemic economic crises often produce major turning points, so a collapse of the Extended Bretton Woods II regime cannot be ruled out.