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

  • 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

    ()

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.

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Paper provided by CERDI in its series Working Papers with number 201326.

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Length: 45
Date of creation: 2013
Date of revision:
Publication status: Published in Applied Economics, 2016, pages
Handle: RePEc:cdi:wpaper:1533
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