Is the exchange rate regime really irrelevant for external adjustment?
We argue that evidence on whether floating exchange rates facilitate external adjustment is contradictory because existing regime classifications do not adequately capture exchange rate flexibility relevant to external adjustment. Using a trade-weighted bilateral exchange rate volatility measure, we show that exchange rate flexibility indeed matters for current account dynamics.
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- Sabine Herrmann, 2009.
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- Menzie D. Chinn & Shang-Jin Wei, 2008.
"A Faith-based Initiative: Does a Flexible Exchange Rate Regime Really Facilitate Current Account Adjustment?,"
NBER Working Papers
14420, National Bureau of Economic Research, Inc.
- Menzie D. Chinn & Shang-Jin Wei, 2009. "A Faith-based Initiative: Does a Flexible Exchange Rate Regime Really Facilitate Current Account Adjustment?," Working Papers 122009, Hong Kong Institute for Monetary Research.
- Chinn, Menzie David & Wei, Shang-Jin, 2008. "A Faith-based Initiative: Does a Flexible Exchange Rate Regime Really Facilitate Current Account Adjustment?," CEPR Discussion Papers 7076, C.E.P.R. Discussion Papers.
- Eduardo Levy-Yeyati & Federico Sturzenegger, 2003. "To Float or to Fix: Evidence on the Impact of Exchange Rate Regimes on Growth," American Economic Review, American Economic Association, vol. 93(4), pages 1173-1193, September.
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