Exchange Rate Regime Transitions
The “hollowing-out,” or “two poles” hypothesis is tested in the context of a Markov chain model of exchange rate transitions. In particular, two versions of the hypothesis—that hard pegs are an absorbing state, or that fixes and floats form a closed set, with no transitions to intermediate regimes—are tested using two alternative classifications of regimes. While there is some support for the lack of exits from hard pegs (i.e., that they are an absorbing state), the data generally indicate that the intermediate cases will continue to constitute a sizable proportion of actual exchange rate regimes.
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- Robert P. Flood & Jagdeep S. Bhandari & Jocelyn P. Horne, 1989. "Evolution of Exchange Rate Regimes," IMF Staff Papers, Palgrave Macmillan, vol. 36(4), pages 810-835, December.
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"Does the Nominal Exchange Rate Regime Matter?,"
NBER Working Papers
5874, National Bureau of Economic Research, Inc.
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- Atish R. Ghosh & Anne-Marie Gulde & Jonathan D. Ostry & Holger C. Wolf, 1997. "Does The Nominal Exchange Rate Regime Matter?," Working Papers 97-09, New York University, Leonard N. Stern School of Business, Department of Economics.
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Elsevier, vol. 54(2), pages 387-404, December.
- Jeffrey A. Frankel, 1999. "No Single Currency Regime is Right for All Countries or At All Times," NBER Working Papers 7338, National Bureau of Economic Research, Inc.
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"The Mirage of Fixed Exchange Rates,"
NBER Working Papers
5191, National Bureau of Economic Research, Inc.
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