Handbook of the International Political Economy of Monetary Relations
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Handbook of the International Political Economy of Monetary Relations

Edited by Thomas Oatley and W. Kindred Winecoff

This extensive Handbook provides an in-depth exploration of the political economy dynamics associated with the international monetary and financial systems. Leading experts offer a fresh take on research into the interaction between system structure, the self-interest of private firms, the political institutions within which governments make policy, and the ideas that influence beliefs about appropriate policy responses. Crucially they also assess how these factors have shaped the political economy of various facets of monetary and financial systems.
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Chapter 9: Private actor exchange rate policy preferences

Stefanie Walter


The level and the stability of the exchange rate can have significant consequences on the material well-being of individuals and firms, especially when they live or operate in countries with a high level of economic and financial integration into the world economy, or when these actors are strongly involved in international trade or finance. Since the interests of private actors are therefore likely to influence policymakers' exchange rate policy decisions, it is important to understand the nature and intensity of these policy preferences. To facilitate such an understanding, this chapter provides an overview about the current state of the literature on private actors' exchange rate policy preferences. In this chapter I focus on the policy preferences of both individuals and the corporate sector. Much of the literature has focused mainly on the interests of firms and different economic sectors who often hold very distinct policy preferences with regard to exchange rate policy and are therefore much more active in lobbying the government on macroeconomic policies than other groups (e.g. Frieden 1991, 2002). More recent work has shown, however, that voters' interests also play an important role in the realm of exchange rate policymaking (e.g. Hobolt and Leblond 2009). Even though individuals may not be able to formulate consistent exchange rate policy preferences when asked directly (McNamara 1998; Bearce and Tuxhorn 2012), there is evidence that voters do punish or reward policymakers for exchange rate policy decisions ex post (Walter 2009, 2012).

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