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Domestic pressures and the exchange rate regime: why economically bad decisions are politically popular?

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  • H.P. GRÃœNER

    (University of Konstanz)

  • C. HEFEKER

    (University of Konstanz)

Abstract

Every currency crisis brings with it a discussion on the optimal choice of the exchange rate regime. This literature is characterised by an exclusive focus on this single policy issue whilst taking other institutional choices as given. The authors attempt to develop an approach which incorporates a simultaneous choice of three major institutional elements that are germane to this issue and which affect social welfare.

Suggested Citation

  • H.P. Grãœner & C. Hefeker, 1995. "Domestic pressures and the exchange rate regime: why economically bad decisions are politically popular?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(194), pages 331-350.
  • Handle: RePEc:psl:bnlqrr:1995:34
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10496/10383
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    Cited by:

    1. Bernd Hayo & Carsten Hefeker, 2001. "Do We Really Need Central Bank Independence? A Critical Re- examination," Macroeconomics 0103006, EconWPA.
    2. Hayo, Bernd & Hefeker, Carsten, 2002. "Reconsidering central bank independence," European Journal of Political Economy, Elsevier, vol. 18(4), pages 653-674, November.

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