Exchange Rate Regime Durability and Performance in Developing Countries Versus Advanced Economies
AbstractDrawing on new data and advances in exchange rate regimes' classification, we find that countries appear to benefit by having increasingly flexible exchange rate systems as they become richer and more financially developed. For developing countries with little exposure to international capital markets, pegs are notable for their durability and relatively low inflation. In contrast, for advanced economies, floats are distinctly more durable and also appear to be associated with higher growth. For emerging markets, our results parallel the Baxter and Stockman classic exchange regime neutrality result, though pegs are the least durable and expose countries to higher risk of crisis.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10673.
Date of creation: Aug 2004
Date of revision:
Publication status: published as Husain, Aasim M., Ashoka Mody and Kenneth S. Rogoff. "Exchange Rate Regime Durability And Performance In Developing Versus Advanced Economies," Journal of Monetary Economics, 2005, v52(1,Jan), 35-64.
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Find related papers by JEL classification:
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-31 (All new papers)
- NEP-CBA-2004-08-31 (Central Banking)
- NEP-CWA-2004-08-31 (Central & Western Asia)
- NEP-IFN-2004-08-31 (International Finance)
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