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Choosing (and reneging on) exchange rate regimes

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  • Alberto Alesina
  • Alexander Wagner

Abstract

We use data on announced and actual exchange rate arrangements to ask which countries follow de facto regimes different from their de iure ones, that is, do not do what they say. Our results suggest that countries with poor institutional quality have difficulty in maintaining pegging and abandon it more often. In contrast, countries with relatively good institutions display fear of floating, i.e. they manage more than announced, perhaps to signal their differences from those countries incapable of maintaining promises of monetary stability.

Suggested Citation

  • Alberto Alesina & Alexander Wagner, 2003. "Choosing (and reneging on) exchange rate regimes," NBER Working Papers 9809, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9809 Note: EFG IFM ME
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    JEL classification:

    • F3 - International Economics - - International Finance

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