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...

The choice of exchange rate regime has become one of the most important issues once more in many economies after the financial crises in recent years. In the wake of the financial crises, many countries, especially emerging market economies, opted for floating exchange rate regimes by forsaking the pegged regimes. Consequently, an old debate on the choice and determinants of exchange rate regim...

We study the impact on financial fragility of globalization and a switch from managed to freely floating exchange rate regime in the context of a two-country multi-region model a la Allen and Gale (Journal of Political Economy, 2000) with open-economy monetary features of Chang and Velasco (Journal of Economic Theory, 2000). In this economy, both banking and exchange rate crises may develop. In...

Inarguably, the escalation in dollar rates and price instability Nigerian economy underwent significant structural institutional changes. In assessing importance of understanding exchange rates, it becomes imperative to build reliable models for predicting volatility home currency. Hence, this study aims model rate using Markov regime-switching model. The analyses returns two three distinct reg...

abstract main objective of this paper is to investigate the impact of exchange rate misalignment on wheat’s producer estimates (pse), using the 1989-2007 period’s data. for this purpose, vector error correction model (vecm) along with the use of real exchange rate based on purchasing power party (ppp) was applied to estimate nominal equilibrium exchange rates. then, by using market price suppor...

Bernhard and Leblang (1999) argue that since adopting a pegged exchange rate in an era of mobile capital inhibits the use of monetary policy for electoral purposes, elements of domestic political institutions that influence the expected utility of controlling office ought to help determine the choice of exchange rate regime. Clark (2001) argues that since adopting a pegged exchange rate enhance...

this paper estimates the determinants of inflation in iran using a linear and non- linear regression model over the period 1959-2008. in the model specification, the conventional variables (liquidity, production and exchange rate) as well as positive and negative oil revenue shocks, monetary disequilibrium, and demand gap are considered. the results show that nonlinear time series regression mo...