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Exchange Rate Regimes and Unemployment

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  • Horst Feldmann

Abstract

Using data on 78 countries over 1980 to 2008 and a host of controls, this paper finds that switching from a floating regime to a pegged or an intermediate regime is likely to substantially reduce unemployment. Using a three-way regime classification, the estimated effect of switching to a pegged (to an intermediate) regime is around two percentage points (around one percentage point) after 2 years. These results are robust to variations in both specification and three-way classification. When using a four-way classification, we find evidence that switching from a float to a hard peg is most likely to reduce unemployment. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Horst Feldmann, 2013. "Exchange Rate Regimes and Unemployment," Open Economies Review, Springer, vol. 24(3), pages 537-553, July.
    • Handle: RePEc:kap:openec:v:24:y:2013:i:3:p:537-553
    DOI: 10.1007/s11079-012-9249-1
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    More about this item

    Keywords

    Exchange rate regimes; Unemployment; E24; F31; F33; J64;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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