IDEAS home Printed from https://ideas.repec.org/a/taf/intecj/v13y1999i2p89-102.html
   My bibliography  Save this article

Determinants of the Exchange Rate Regime: A Time Series Analysis for Chile

Author

Listed:
  • Leon Javoer

Abstract

The objective of this paper is to examine the determinants of the exchange rate regime within a time series approach, in order to overcome limitations of the cross-section approach. The former approach is based upon the assumption that policy makers would not change the regime until the long term benefits would exceed the cost of the switch. This would imply some inertia in regimes that will be better captured by a time series analysis. The empirical results show that: (i) Chile opted captured by a time series analysis. The empirical results show that: (i) Chile opted for a fixed exchange rate regime as an anchor when domestic inflation was relatively high with respect to world inflation, and (ii) minimizing real consumption variability rather than real output variability was a dominant target for Chilean authorities, with domestic monetary disturbances favoring a more flexible arrangement, while real shocks were absorbed by changes in the balanced of payments supporting a fixed regime. [F31,F32]

Suggested Citation

  • Leon Javoer, 1999. "Determinants of the Exchange Rate Regime: A Time Series Analysis for Chile," International Economic Journal, Taylor & Francis Journals, vol. 13(2), pages 89-102.
  • Handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:89-102
    DOI: 10.1080/10168739900000039
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/10168739900000039
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Boyer, Russell S, 1978. "Optimal Foreign Exchange Market Intervention," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 1045-1055, December.
    2. Savvides, Andreas, 1990. "Real exchange rate variability and the choice of exchange rate regime by developing countries," Journal of International Money and Finance, Elsevier, vol. 9(4), pages 440-454, December.
    3. Aschauer, David & Greenwood, Jeremy, 1983. "A Further Exploration in the Theory of Exchange Rate Regimes," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 868-875, October.
    4. Frenkel, Jacob A. & Aizenman, Joshua, 1982. "Aspects of the optimal management of exchange rates," Journal of International Economics, Elsevier, vol. 13(3-4), pages 231-256, November.
    5. Nelson, Forrest & Olson, Lawrence, 1978. "Specification and Estimation of a Simultaneous-Equation Model with Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(3), pages 695-709, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:intecj:v:13:y:1999:i:2:p:89-102. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst). General contact details of provider: http://www.tandfonline.com/RIEJ20 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.