Financial Turmoil and Choice of Exchange Rate Regime
نویسندگان
چکیده
منابع مشابه
Financial Fragility and the Exchange Rate Regime
We study financial fragility, exchange rate crises, and monetary policy in an open economy version of a Diamond-Dybvig model. The banking system, the exchange rate regime, and central bank credit policy are seen as parts of a mechanism intended to maximize social welfare; if the mechanism fails, banking crises and speculative attacks become possible. We compare currency boards, fixed rates, and...
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We develop a framework for studying the choice of exchange rate regime in an open economy where the local currency is vulnerable to speculative attacks. The framework makes it possible to study, for the first time, the strategic interaction between the ex ante choice of regime and the likelihhod of ex post currency attacks. The optimal regime is determined by a policymaker who trades off the lo...
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We test a simple model of exchange rate regime choice with data for 65 non-OECD countries covering the period 1980-94. We find that the variance of output at home and in potential target countries as well as the correlation between home and foreign real activity are powerful and robust predictors of exchange rate regime choice. Surprisingly, a more volatile foreign economy can be an argument in...
متن کاملToward a Stable System of Exchange Rates: Implications of the Choice of Exchange Rate Regime
This paper conducts a comprehensive empirical analysis to examine the stability of the overall system of exchange rates along two dimensions: does the choice of exchange rate regime help individual countries achieve their domestic macroeconomic goals? And does this choice of regime facilitate the country’s interaction with the rest of the system? The empirical findings suggest that there is no ...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 1999
ISSN: 1556-5068
DOI: 10.2139/ssrn.1817197