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Exchange Rate Regimes of Developing Countries: Global Context and Individual Choices

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  • Jadresic, Esteban
  • Masson, Paul
  • Mauro, Paolo

Abstract

This paper argues that, in analyzing the choice of exchange rate regimes in developing and transition countries in the present global economic context, it is essential to distinguish between those countries with substantial involvement in international financial markets and those where involvement is limited. For developing countries with important linkages to modern global capital markets, an important lesson of the recent crises in emerging market countries is that the requirements for sustaining pegged exchange rate regimes have become significantly more demanding. For many emerging market countries, therefore, regimes that allow substantial actual exchange rate flexibility are probably desirable. If supported by the requisite policy discipline and institutional structures, however, hard currency pegs may also be appropriate for some of these countries. Beyond the emerging markets countries, for many developing countries with less linkage to global capital markets, traditional exchange rate pegs and intermediate regimes are more viable and retain important advantages.
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  • Jadresic, Esteban & Masson, Paul & Mauro, Paolo, 2001. "Exchange Rate Regimes of Developing Countries: Global Context and Individual Choices," Journal of the Japanese and International Economies, Elsevier, vol. 15(1), pages 68-101, March.
  • Handle: RePEc:eee:jjieco:v:15:y:2001:i:1:p:68-101
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    Cited by:

    1. Bofinger, Peter & Wollmershäuser, Timo, 2000. "Options for the exchange rate policies in the EU accession countries (and other emerging market economies)," W.E.P. - Würzburg Economic Papers 13, University of Würzburg, Chair for Monetary Policy and International Economics.
    2. Bayoumi, Tamim & Eichengreen, Barry & Mauro, Paolo, 2000. "On Regional Monetary Arrangements for ASEAN," Journal of the Japanese and International Economies, Elsevier, vol. 14(2), pages 121-148, June.
    3. repec:onb:oenbwp:y::i:67:b:1 is not listed on IDEAS
    4. Berg, Andrew & Borensztein, Eduardo & Mauro, Paolo, 2002. "An evaluation of monetary regime options for Latin America," The North American Journal of Economics and Finance, Elsevier, vol. 13(3), pages 213-235, December.

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    JEL classification:

    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions

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