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To Fix Or To Float From Perspective Of Output Volatility And Vulnerability To Crisis

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  • Marjan Petreski

    (Economist for macroeconomic models and forecasting, Ministry of Finance)

Abstract

The aim of this paper is to offer some less-explored theoretical insights into the exchange rate economics. The debate of whether to fix or to float is still lively, even in the context of output volatility under alternative exchange rate regimes; specifically, the effect of the exchange rate regime on output volatility remains unclear. The very scarce number of studies found divergent results: none of those are overwhelming and none give clear notion of how the regime affects output volatility. The latter might be due to the fact that the exchange-rate regime is not related to output volatility neither, but also due to the fact that the very limited number of studies on this issue do not comprehend it in a coherent and serious manner. Consequently, the issue remains and empirical problem and asks for further empirical investigation.

Suggested Citation

  • Marjan Petreski, 2008. "To Fix Or To Float From Perspective Of Output Volatility And Vulnerability To Crisis," Journal Articles, Center For Economic Analyses, pages 9-24, June.
    • Handle: RePEc:cmk:journl:y:2008:p:9-24
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    References listed on IDEAS

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    Cited by:

    1. Marjan Petreski, 2010. "An Overhaul of a Doctrine: Has Inflation Targeting Opened a New Era in Developing-country Peggers?," FIW Working Paper series 057, FIW.

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    More about this item

    Keywords

    exchange rate regime; output volatility; peg exit;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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