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Mark my Words: Information and the Fear of Declaring one’s Exchange Rate Regime

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  • Pierre-Guillaume Méon
  • Geoffrey Minne

Abstract

This paper investigates the role of a free press and the circulation of information on the capacity of a country to declare an exchange regime that differs from the regime it implements de facto. We report consistent evidence that greater press freedom and easier access to information result in a lower probability of untruthfully reporting the de facto regime. These findings withstand a large set of robustness checks, including controlling for democracy and for the institutional and political environment, controlling for endogeneity, and using various estimation methods. The results are particularly strong for developing countries.

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Paper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/163527.

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Date of creation: Mar 2014
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Publication status: Published in: Journal of development economics (2014) v.107,p.244-261
Handle: RePEc:ulb:ulbeco:2013/163527

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Keywords: Official exchange rate regime; de facto exchange rate regime; press freedom; information; fear of floating.;

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