Post-Crisis Exchange Rate Policy in Five Asian Countries: Filling in the "Hollow Middle"?
AbstractFollowing the 1997-98 financial turmoil, crisis countries in Asia moved toward either floating or fixed exchange rate systems, superficially consistent with the bipolar view of exchange rate regimes and the "hollow middle" hypothesis. But some observers have claimed that, despite the changes in their de jure exchange rate regimes, the crisis countries' policies have de facto been very similar in the post- and pre-crisis periods. This paper analyzes the evidence and concludes that, except for Malaysia, which adopted a hard peg and imposed capital controls, the other crisis countries are floating more than before, though less than "real" floaters do. The intermediate exchange rate policies pursued by most of the crisis countries during the post-crisis can be justified on second-best arguments.
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Bibliographic InfoPaper provided by Department of Economics, Williams College in its series Center for Development Economics with number 167.
Date of creation: Oct 2001
Date of revision:
Other versions of this item:
- Hernandez, Leonardo & Montiel, Peter J., 2003. "Post-crisis exchange rate policy in five Asian countries: Filling in the "hollow middle"?," Journal of the Japanese and International Economies, Elsevier, vol. 17(3), pages 336-369, September.
- Leonardo Hernández & Peter Montiel, 2002. "Post-crisis exchange rate policy in five Asian countries: filling in the 'hollow middle'?," Proceedings, Federal Reserve Bank of San Francisco, issue Sep.
- Leonardo HernÃ¡ndez & Peter Montiel, 2001. "Post-Crisis Exchange Rate Policy in Five Asian Countries: Filling in the Â“Hollow MiddleÂ”?," Department of Economics Working Papers 2001-05, Department of Economics, Williams College.
- Leonardo Hernández & Peter J. Montiel, 2002. "Post-crisis exchange rate policy in five Asian countries: filling in the "hollow middle"?," Pacific Basin Working Paper Series 2002-07, Federal Reserve Bank of San Francisco.
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-21 (All new papers)
- NEP-CBA-2001-11-21 (Central Banking)
- NEP-IFN-2001-11-21 (International Finance)
- NEP-SEA-2001-11-05 (South East Asia)
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