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Crises and Exchange Rate Regimes: Time to break down the bipolar view?

Author

Listed:
  • Jean-Louis COMBES

    () (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Alexandru MINEA

    () (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Mousse Ndoye SOW

    ()

Abstract

We revisit the link between crises and exchange rate regimes (ERR). Using a panel of 90 developed and developing countries over the period 1980-2009, we find that corner ERR are not more prone to crises compared to intermediate ERR. This finding holds for different types of crises (banking, currency and debt), and is robust to a wide set of alternative specifications. Consequently, we clearly break down the traditional bipolar view: countries that aim at preventing crisis episodes should focus less on the choice of the ERR, and instead implement sound structural macroeconomic policies.

Suggested Citation

  • Jean-Louis COMBES & Alexandru MINEA & Mousse Ndoye SOW, 2013. "Crises and Exchange Rate Regimes: Time to break down the bipolar view?," Working Papers 201326, CERDI.
  • Handle: RePEc:cdi:wpaper:1533
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    Cited by:

    1. Alexis CRUZ-RODRIGUEZ, 2016. "Exchange Arrangements and Currency Crises: What´s the matter with the exchange rate classification?," Journal of Economics and Political Economy, KSP Journals, vol. 3(2), pages 377-392, June.
    2. Nakatani, Ryota, 2018. "Real and financial shocks, exchange rate regimes and the probability of a currency crisis," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 60-73.
    3. Cruz-Rodríguez, Alexis, 2016. "Exchange Arrangements and Speculative Attacks: Is there a link?," MPRA Paper 72359, University Library of Munich, Germany.

    More about this item

    Keywords

    Exchange rate regimes; Economic crises; Bipolar view;

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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