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Experiences and lessons from exchange rate regimes in emerging economies,” NBER Working Paper No (2003)
| Citations: | 58 - 12 self |
BibTeX
@MISC{Frankel03experiencesand,
author = {Jeffrey A. Frankel and Jeffrey A. Frankel and Jeffrey A. Frankel and Jeffrey A. Frankel},
title = {Experiences and lessons from exchange rate regimes in emerging economies,” NBER Working Paper No},
year = {2003}
}
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Abstract
JEL No. F3 The paper reviews recent trends in thinking on exchange rate regimes. It begins by classifying countries into regimes, noting the distinction between de facto and de jure regimes, but also noting the low correlation among proposed ways of classifying the latter. The advantages of fixed exchange rates versus floating are reviewed, including the recent evidence on the trade-promoting effects of currency unions. Frameworks for tallying up the pros and cons include the traditional Optimum Currency Area criteria, as well as some new criteria from the experiences of the 1990s. The Corners Hypothesis may now be “peaking ” as rapidly as it rose, in light of its lack of foundations. Empirical evidence regarding the economic performance of different regimes notes depends entirely on the classification scheme. A listing of possible nominal anchors alongside exchange rates observes that each candidate has its own vulnerability, leading to the author’s proposal to Peg the Export Price (PEP). The concluding section offers some implications for East Asia.
Keyphrases
exchange rate regime nber working paper trade-promoting effect recent evidence classification scheme fixed exchange rate export price recent trend empirical evidence proposed way corner hypothesis jure regime author proposal economic performance exchange rate low correlation east asia different regime note traditional optimum currency area criterion new criterion possible nominal anchor currency union
