Advanced Search
MyIDEAS: Login

Why the Middle is Unstable: The Political Economy of Exchange Rate Regimes and Currency Crises

Contents:

Author Info

  • Thomas D. Willett
Registered author(s):

    Abstract

    The contribution of sticky exchange rates to the rash of currency crises over the past decade has become a major topic of international monetary analysis and policy discussion. While there is widespread agreement among economists that the middle of the exchange rate spectrum, adjustable pegs, is highly crisis-prone in a world of substantial capital mobility, Jeffrey Frankel has recently argued that, surprisingly, we lack a clear theoretical rationale for why this is so. This paper attempts to fill that void. It argues that Frankel is correct in terms of economic analysis alone, but that when political economy considerations are introduced then a satisfactory explanation is at hand. Key aspects of this political economy perspective are laid out and implications for exchange rate policy are considered. The analysis suggests that for promoting currency stability the traditionally debated distinctions between crawling bands and managed floats are likely less important than the political environments in which they are operated. Copyright 2007 The Author Journal compilation Blackwell Publishing Ltd. 2007 .

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-9701.2007.01023.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Wiley Blackwell in its journal World Economy.

    Volume (Year): 30 (2007)
    Issue (Month): 5 (05)
    Pages: 709-732

    as in new window
    Handle: RePEc:bla:worlde:v:30:y:2007:i:5:p:709-732

    Contact details of provider:
    Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920

    Order Information:
    Web: http://www.blackwellpublishing.com/subs.asp?ref=0378-5920

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Wong, Clement Yuk-pang & Cheung, Yin-Wong, 2008. "Are All Measures of International Reserves Created Equal? An Empirical Comparison of International Reserve Ratios," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 2(15), pages 1-61.
    2. Walter, Stefanie, 2008. "A New Approach for Determining Exchange-Rate Level Preferences," International Organization, Cambridge University Press, vol. 62(03), pages 405-438, July.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:30:y:2007:i:5:p:709-732. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.