From Fixers to Floaters: An Empirical Analysis of the Decline in Fixed Exchange Rate Regimes 1973-1995
The purpose of this article is to explain the decrease in the fixed exchange rate regimes we have experienced the last decades. Our econometric approach is duration analysis and the explanatory variables used are taken from the literature on optimum currency areas. The sample consists of 51 countries and covers the period 1973-1995. The degree of openness proves to be the most influential variable. Increasing the openness by 1% decreases the hazard for adopting a floating exchange rate by 1.29%, i.e. an elasticity of -1.29. The size of a country and the inflationary differential against foreign countries are also significant. But the corresponding elasticities (0.19 and 0.25) are considerably lower than for openness.
|Date of creation:||01 Aug 2000|
|Date of revision:|
|Contact details of provider:|| Phone: 1 212 998 3820|
Fax: 1 212 995 4487
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
- 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.
- Melvin, Michael, 1985. "The Choice of an Exchange Rate System and Macroeconomic Stability," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(4), pages 467-78, November.
- Meyer, Bruce D, 1990.
"Unemployment Insurance and Unemployment Spells,"
Econometric Society, vol. 58(4), pages 757-82, July.
- Honkapohja, Seppo & Pikkarainen, Pentti, 1992. "Country Characteristics and the Choice of the Exchange Rate Regime: Are Mini-skirts Followed by Maxis?," CEPR Discussion Papers 744, C.E.P.R. Discussion Papers.
- Maurice Obstfeld & Kenneth Rogoff, 1995.
"The Mirage of Fixed Exchange Rates,"
NBER Working Papers
5191, National Bureau of Economic Research, Inc.
- Holden, Paul & Holden, Merle & Suss, Esther C, 1979. "The Determinants of Exchange Rate Flexibility: An Empirical Investigation," The Review of Economics and Statistics, MIT Press, vol. 61(3), pages 327-33, August.
- Heller, H Robert, 1978. "Determinants of Exchange Rate Practices," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 10(3), pages 308-21, August.
- Fleming, J Marcus, 1971. "On Exchange Rate Unification," Economic Journal, Royal Economic Society, vol. 81(323), pages 467-88, September.
- Dreyer, Jacob S., 1978. "Determinants of exchange-rate regimes for currencies of developing countries: Some preliminary results," World Development, Elsevier, vol. 6(4), pages 437-445, April.
- Rose, Andrew K., 1996. "Explaining exchange rate volatility: an empirical analysis of 'the holy trinity' of monetary independence, fixed exchange rates, and capital mobility," Journal of International Money and Finance, Elsevier, vol. 15(6), pages 925-945, December.
When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:1754. 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: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.