Exits from Heavily Managed Exchange Rate Regimes
AbstractA widely held nostrum is that countries should exit heavily managed exchange rate regimes when the going is good, rather than when the exchange rate is under pressure to depreciate. Have countries followed this advice in practice? And, if so, how good has the going been? We find that in the past 25 years or so, almost all exits to more flexible regimes were followed by a depreciation of the exchange rate, and that exits were about evenly divided between disorderly and orderly cases. A logit econometric model, indicates that the general circumstances of orderly and disorderly exits have been broadly similar: an overvalued real exchange rate, falling reserves, a difficult fiscal position, and high world interest rates. Wellestablished pegs were less likely to end.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 05/39.
Date of creation: 01 Feb 2005
Date of revision:
Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-22 (All new papers)
- NEP-CBA-2005-10-22 (Central Banking)
- NEP-FIN-2005-10-22 (Finance)
- NEP-FMK-2005-10-22 (Financial Markets)
- NEP-IFN-2005-10-22 (International Finance)
- NEP-MON-2005-10-22 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ahmet Asici & Charles Wyplosz, 2003.
"The Art of Gracefully Exiting a Peg,"
The Economic and Social Review,
Economic and Social Studies, vol. 34(3), pages 211â228.
- Michael W. Klein & Nancy P. Marion, 1994.
"Explaining the Duration of Exchange-Rate Pegs,"
NBER Working Papers
4651, National Bureau of Economic Research, Inc.
- Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December.
- Reinhart, Carmen & Rogoff, Kenneth, 2004.
"The modern history of exchange rate arrangements: A reinterpretation,"
14070, University Library of Munich, Germany.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 1-48, February.
- Carmen M. Reinhart & Kenneth S. Rogoff, 2002. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," NBER Working Papers 8963, National Bureau of Economic Research, Inc.
- Pierre-Richard Agenor, 2004. "Orderly exits from adjustable pegs and exchange rate bands," Journal of Policy Reform, Taylor and Francis Journals, vol. 7(2), pages 83-108.
- Inci Ã–tker & Rupa Duttagupta, 2003. "Exits From Pegged Regimes: An Empirical Analysis," IMF Working Papers 03/147, International Monetary Fund.
- Sébastien Wälti, 2005.
"The duration of fixed exchange rate regimes,"
The Institute for International Integration Studies Discussion Paper Series
- Joshua Aizenman & Reuven Glick, 2005.
"Pegged exchange rate regimes -- a trap?,"
Working Paper Series
2006-07, Federal Reserve Bank of San Francisco.
- Lin, Shu & Ye, Haichun, 2011. "The role of financial development in exchange rate regime choices," Journal of International Money and Finance, Elsevier, vol. 30(4), pages 641-659, June.
- Ahmet Atil Asici & Nadezhda Ivanova & Charles Wyplosz, 2008.
"How to exit from fixed exchange rate regimes?,"
International Journal of Finance & Economics,
John Wiley & Sons, Ltd., vol. 13(3), pages 219-246.
- Asici, Ahmet Atil & Ivanova, Nadezhda & Wyplosz, Charles, 2005. "How to Exit from Fixed Exchange Rate Regimes," CEPR Discussion Papers 5141, C.E.P.R. Discussion Papers.
- Ahmet Asici; Nadezhda Ivanova; Charles Wyplosz, 2005. "How to Exit From Fixed Exchange Rate Regimes?," IHEID Working Papers 03-2005, Economics Section, The Graduate Institute of International Studies.
- Dalia Hakura, 2005. "Are Emerging Market Countries Learning to Float?," IMF Working Papers 05/98, International Monetary Fund.
- Sean Barrett, 2005. "Risk Equalisation and Competition in the Irish Health Insurance Market," Trinity Economics Papers 200058, Trinity College Dublin, Department of Economics.
- Ahmet Atil Asici, 2007.
"Parametric and Non-parametric Approaches to Exits from Fixed Exchange Rate Regimes,"
IHEID Working Papers
14-2007, Economics Section, The Graduate Institute of International Studies.
- Ahmet Atil Asici, 2010. "Parametric and non-parametric approaches to exits from fixed exchange rate regimes," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 381-406.
- Ahmed Atil Asici, 2008. "Parametric and Non-Parametric Approaches to Exits from Fixed Exchange Rate Regimes," Working Papers 401, Economic Research Forum, revised May 2008.
- repec:tcd:wpaper:tep8 is not listed on IDEAS
- Aizenman, Joshua & Glick, Reuven, 2005. "Pegged Exchange Rate Regimes â€“ A Trap?," Santa Cruz Department of Economics, Working Paper Series qt92n6v1rm, Department of Economics, UC Santa Cruz.
- Lucjan T. Orlowski, 2005.
"Monetary Policy Adjustments on the Final Passage towards the Euro,"
CASE Network Studies and Analyses
0294, CASE-Center for Social and Economic Research.
- Lucjan T Orlowski, 2005. "Monetary Policy Adjustments on the Final Passage towards the Euro," Macroeconomics 0503022, EconWPA.
- Post, Erik, 2007. "Macroeconomic imbalances and exchange rate regime shifts," Working Paper Series 2007:4, Uppsala University, Department of Economics.
- Robert Lafrance, 2008. "China's Exchange Rate Policy: A Survey of the Literature," Discussion Papers 08-5, Bank of Canada.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).
If references are entirely missing, you can add them using this form.