Updated 2006-10-28 00:38
|Pegged Exchange Rates||a type of exchange rate regime wherein a currency's value is matched to the value of another single currency (most often the US Dollar), to a basket of other currencies, or to another measure of value, such as gold.|
|Why do countries Peg their exchange rates?||- Make the cost of their goods lower for foreigners.|
- Increase investor confidence and avoid original sin which can lead to a currency mismatch.
|Dirty Float||Floating a currency when the rate is controlled by intervention by the monetary authorities.|
|Currency Union||A situation where several countries have agreed to share a single currency among them, for example, the Euro|
|Dollarization||Phenomenon that occurs when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency.|
|Okun's Law||GDP and unemployment are inversely related|