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Exchange rate regime choice and currency crises

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  • AsIcI, Ahmet AtIl

Abstract

Exchange rate regime choice is not exogenous, but it depends on the structural, political and financial features of countries. However, it is often the case that the regime actually pursued and the one that is imposed by country features do not match one to one. The existing empirical crisis models do not take fully into account the regime in which the crisis unfolded. The aim of this paper is to incorporate the appropriateness of the regime choice into the standard currency crisis model. The results show that the odds of crisis increase significantly in countries which have chosen regimes inconsistently.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Systems.

Volume (Year): 35 (2011)
Issue (Month): 3 (September)
Pages: 419-436

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Handle: RePEc:eee:ecosys:v:35:y:2011:i:3:p:419-436

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Keywords: Exchange rate regime choice Currency crisis Multinomial crisis model;

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References

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Cited by:
  1. Lazăr, Dorina & Todea, Alexandru & Filip, Diana, 2012. "Martingale difference hypothesis and financial crisis: Empirical evidence from European emerging foreign exchange markets," Economic Systems, Elsevier, Elsevier, vol. 36(3), pages 338-350.
  2. Jean-Louis Combes & Alexandru Minea & Mousse Ndoye SOW, 2014. "Crises and Exchange Rate Regimes: Time to break down the bipolar view?," Working Papers halshs-00944372, HAL.

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