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A comparison of exchange rate regime choice in emerging markets with advanced and low income nations for 1999–2011

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  • Ghosh, Amit

Abstract

The recent global financial crisis has sparked a renewal of debate on the choice of exchange rate regimes. Creating a tripartite regime classification, the present study examines their determinants for 137 nations spanning the period 1999–2011. I find that trade openness, economic development, foreign-currency liabilities, and foreign exchange reserve holdings increase the likelihood of choosing a fixed-type regime in emerging markets while economic size, export concentration ratios and financial development lower such a chance. Capital controls, inflation differential with an anchor nation and land size significantly influence regime-choice in advanced and low income countries, but are largely insignificant in emerging markets.

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  • Ghosh, Amit, 2014. "A comparison of exchange rate regime choice in emerging markets with advanced and low income nations for 1999–2011," International Review of Economics & Finance, Elsevier, vol. 33(C), pages 358-370.
    • Handle: RePEc:eee:reveco:v:33:y:2014:i:c:p:358-370
    DOI: 10.1016/j.iref.2014.02.008
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    Cited by:

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    2. He, Qing & Liu, Junyi & Yu, Jishuang, 2023. "Dancing with dragon: The RMB and developing economies’ currencies," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. J. Scott Davis & Ippei Fujiwara & Jiao Wang, 2018. "Dealing with Time Inconsistency: Inflation Targeting versus Exchange Rate Targeting," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(7), pages 1369-1399, October.
    4. Ippei Fujiwara & Scott Davis, 2017. "Dealing with Time-inconsistency: Inflation Targeting vs. Exchange Rate Targeting," 2017 Meeting Papers 795, Society for Economic Dynamics.
    5. Huang, Chao-Hsi & Yang, Chih-Yuan, 2015. "European exchange rate regimes and purchasing power parity: An empirical study on eleven eurozone countries," International Review of Economics & Finance, Elsevier, vol. 35(C), pages 100-109.

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    More about this item

    Keywords

    Advanced economies; Emerging markets; Exchange rate regimes; Regime-flexibility; Low income countries;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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