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Have Exchange Rate Regimes in Asia become More Flexible Post crisis? Re-VISITING the EVIDENCE

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  • Tony Cavoli

    (SCAPE)

  • Ramkishen S. Rajan

Abstract

There is a broad consensus that the soft US dollar pegs operated by a number of Asian countries prior to 1997 contributed to the regional financial crisis of 1997-98. There is, however, much less agreement on the types of exchange rate regimes operated by many Asian countries since the crisis. Can they still be characterized as soft US dollar pegs, or have they become genuinely more flexible? This paper revisits the evidence regarding the extent of exchange rate flexibility in the five Asian countries (Indonesia, Korea, Malaysia, the Philippines and Thailand) using alternative methodologies and data spanning the pre- and post-crisis time period. Given the diversity of measures of de facto regimes in the literature, the use of alternative methodologies in this paper is critical as a means of obtaining an accurate and robust indication of the type of exchange rate regime operated by a country.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Finance Working Papers with number 22563.

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Date of creation: Jan 2005
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Handle: RePEc:eab:financ:22563

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Keywords: Asia; exchange rate regime; inflation targeting; interest rates; reserves;

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References

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Citations

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Cited by:
  1. Tony Cavoli & Ramkishen S. Rajan, 2006. "Inflation Targeting Arrangements In Asia : Exploring The Role Of The Exchange Rate," Macroeconomics Working Papers, East Asian Bureau of Economic Research 22564, East Asian Bureau of Economic Research.
  2. Ramkishen S. Rajan & Tony Cavoli, 2006. "The Extent of Exchange Rate Flexibility in India: Basket Pegger or Closet US Dollar Pegger?," Working Papers, eSocialSciences id:424, eSocialSciences.
  3. 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., World Scientific Publishing Co. Pte. Ltd., vol. 1(01), pages 1250007-1-1.
  4. Cavoli, Tony, 2009. "Is fear of floating justified?: The East Asia experience," Journal of Policy Modeling, Elsevier, Elsevier, vol. 31(1), pages 1-16.
  5. Vitalie Ciubotaru, 2012. "Identifying the De Facto Exchange Rate Regime for Moldova: A State-Space Approach," Discussion Papers in Economics and Business, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP) 12-10, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  6. Thomas Willett & Eric M.P. Chiu & Sirathorn (B.J.) Dechsakulthorn & Ramya Ghosh & Bernard Kibesse & Kenneth Kim & Jeff (Yongbok) Kim & Alice Ouyang, 2011. "Classifying international aspects of currency regimes," Journal of Financial Economic Policy, Emerald Group Publishing, Emerald Group Publishing, vol. 3(4), pages 288-303, November.

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