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Crises and Exchange Rate Regimes: Time to break down the bipolar view?

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  • Mousse Ndoye SOW
  • Alexandru MINEA

    (Centre d'Etudes et de Recherches sur le Développement International)

  • Jean-Louis COMBES

    ()
    (Centre d'Etudes et de Recherches sur le Développement International)

Abstract

We revisit the link between crises and exchange rate regimes (ERR). Using a panel of 90 developed and developing countries over the period 1980-2009, we find that corner ERR are not more prone to crises compared to intermediate ERR. This finding holds for different types of crises (banking, currency and debt), and is robust to a wide set of alternative specifications. Consequently, we clearly break down the traditional bipolar view: countries that aim at preventing crisis episodes should focus less on the choice of the ERR, and instead implement sound structural macroeconomic policies.

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Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 201326.

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Length: 45
Date of creation: 2013
Date of revision:
Handle: RePEc:cdi:wpaper:1533

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Keywords: exchange rate regimes; economic crises; bipolar view;

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