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Classifying international aspects of currency regimes

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Author Info

  • Thomas Willett
  • Eric M.P. Chiu
  • Sirathorn (B.J.) Dechsakulthorn
  • Ramya Ghosh
  • Bernard Kibesse
  • Kenneth Kim
  • Jeff (Yongbok) Kim
  • Alice Ouyang

Abstract

Purpose – There has been significant interest in the classification of exchange rate regimes in order to investigate a wide range of hypotheses. Studies of the effects of exchange rate regimes on crises and other aspects of economic performance can have important implications for policy choices. The paper provides a guide to the major new large data sets that classify exchange rate regimes and to critically analyze important methodological issues. Design/methodology/approach – The study surveys and critiques the literature and provides theoretical analysis of major issues involved in classifying exchange rate regimes. Findings – The study finds that all of the new data sets have problems but some have more problems than others and several of them are substantial improvements on what was previously available. It is also shown that the best ways to classify depend on the issue being addressed and that for detailed studies variants of measures using the concept of exchange market pressure are the most promising. Directions for future research are also discussed. Originality/value – The paper makes researchers aware of the new data sets that are available and discusses their strengths and weaknesses. It also presents original analysis of several of the major conceptual issues involved in classifying exchange rate regimes.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal Journal of Financial Economic Policy.

Volume (Year): 3 (2011)
Issue (Month): 4 (November)
Pages: 288-303

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Handle: RePEc:eme:jfeppp:v:3:y:2011:i:4:p:288-303

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Related research

Keywords: Foreign exchange; International economics; International finance; International trade; Open economy macroeconomics;

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References

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  1. Reza Y. Siregar & Victor Pontines, 2005. "External Debt and Exchange Rate Overshooting: The Case of Selected East Asian Countries," School of Economics Working Papers 2005-14, University of Adelaide, School of Economics.
  2. Tony Cavoli & Ramkishen Rajan, 2005. "Have Exchange Rate Regimes in Asia Become More Flexible Post Crisis? Re-visiting the Evidence," Centre for International Economic Studies Working Papers 2005-03, University of Adelaide, Centre for International Economic Studies.
  3. Reinhart, Carmen & Rogoff, Kenneth, 2004. "The modern history of exchange rate arrangements: A reinterpretation," MPRA Paper 14070, University Library of Munich, Germany.
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Citations

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Cited by:
  1. William R. Clark, 2012. "Measures of financial openness and interdependence," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 4(1), pages 58-75, April.
  2. Thomas D. Willett & Jeff (Yongbok) Kim & Isriya Nitithanprapas Bunyasiri, 2012. "Measuring Exchange Rate Flexiblity: A Two-Parameter Exchange Market Pressure Approach," Global Journal of Economics (GJE), World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 1250007-1-1.
  3. Hall, Stephen G. & Kenjegaliev, Amangeldi & Swamy, P.A.V.B. & Tavlas, George S., 2013. "Measuring currency pressures: The cases of the Japanese yen, the Chinese yuan, and the UK pound," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 1-20.

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