Choosing the exchange rate regime–a case for intermediate regimes for emerging and developing economies

• Authors: Jurek Michał
• Languages of publication: EN

Abstracts

EN

The main objective of the paper is to verify the vanishing interim regime hypothesis (so-called bipolar view) and to analyse factors that may influence the probability of use of intermediate exchange rate regimes, especially in emerging and developing economies. In order to accomplish the research objectives the evolution of exchange rate regimes is presented with the special consideration of decisions of IMF member states in this respect. Next a logistic regression model that estimates the probability of use of an intermediate regime is applied. The results achieved allow a challenge to the vanishing interim regime hypothesis. Empirical observations support this hypothesis only in advanced countries and not in their emerging and developing peers.

Keywords

EN

bipolar view; exchange rate regimes; monetary policy; vanishing interim; regime hypothesis

• Publisher: Uniwersytet Ekonomiczny w Poznaniu. Wydawnictwo Uniwersytetu Ekonomicznego w Poznaniu
• Journal: Economics and Business Review
• Year: 2018
• Volume: 4(18)
• Issue: 4
• Pages: 46-63

Dates

published

2018-11-14

Contributors

author

Jurek Michał

• Poznań University of Economics and Business, Faculty of Economics, Department of Money and Banking, Poznań, Poland

References

• Alesina, A., Wagner, A.F. (2006). Choosing (and Reneging on) Exchange Rate Regimes. Journal of the European Economic Association, 4(4), 770–799.
• Angkinand, A., Chiu, E.M.P., Willett, T.D. (2009). Testing the Unstable Middle and Two Corners Hypotheses About Exchange Rate Regimes. Open Economies Review, 20(1), 61–83.
• Calvo, G.A., Mishkin F.S. (2003). The Mirage of Exchange Rate Regimes for Emerging Market Economies. Journal of Economic Policy, 17(4), 99–118.
• Chinn, M.D., Ito, H. (2006). What Matters for Financial Development? Capital Controls, Institutions, and Interactions. Journal of Development Economics, 81(1), 163–192.
• Chinn, M.D., Ito, H. (2008). A New Measure of Financial Openness. Journal of Comparative Policy Analysis, 10(3), 309–322.
• Combes, J.-L., , A., Swo, M. (2016). Crises and exchange rate regimes: time to break down the bipolar view? Minea, Applied Economics, 46(46), 4393–4409.
• Corden, W.M. (1994). Economic Policy, Exchange Rates and the International System. Chicago, USA: University of Chicago Press.
• Eichengreen, B. (2008). Exchange Rate Regimes and Capital Mobility: How Much of the Swoboda Thesis Survives? NBER Working Papers, 14100. Retrieved from https://www.nber.org/papers/w14100.
• Eichengreen, B., Razo-Garcia R. (2006). The International Monetary System in the Last and Next 20 Years. Economic Policy, 21(47), 393–442.
• Eichengreen, B. (2004). Capital Flows and Crises. London, England: The MIT Press,
• Esaka, T. (2010). Exchange Rate Regimes, Capital Controls, and Currency Crises: Does the Bipolar View Hold?, 20(1), 91–108.
• Fischer, S. (2001). Distinguished Lecture on Economics in Government. Exchange Rate Regimes: Is the Bipolar View Correct? Journal of Economic Perspectives, 15(2), 3–24.
• Fischer, S. (2008). Mundell-Fleming Lecture: Exchange Rate Systems, Surveillance, and Advice. IMF Staff Papers, 55(3), 367–383.
• Frankel, J.A. (1999). No Single Currency Regime is Right for All Countries or at all Times. NBER Working Papers, 7338. Retrieved from https://www.nber.org/papers/w7338.pdf.
• Frankel, J.A. (2009). What’s In and Out in Global Money. Finance & Development, 46(3), 13–17.
• Frieden, J.A. (2015). Currency Politics. The Political Economy of Exchange Rate Policy. Princeton, USA: Princeton University Press.
• Gandolfo, G. (2004). Elements of International Economics. Berlin, Germany: Springer-Verlag.
• Genberg, H., Swoboda, A. (2005). Exchange Rate Regimes: Does What Countries Say Matter? IMF Staff Papers, (52) Special Issue, 129–141.
• Ghosh, A.R., Ostry, J.D. (2009). Choosing an Exchange Rate Regime. Finance & Development, 46(4), 38–40.
• Habermeier, K., Kokenyne, A., Veyrune, R., Anderson, H. (2009). Revised System for the Classification of Exchange Rate Arrangements, IMF Working Papers, 211. Retrieved from https://www.imf.org/external/pubs/ft/wp/2009/wp09211.pdf.
• IMF. (1999–2015). Annual Reports 1999–2015. Washington D.C.: IMF.
• IMF. (1999–2015). World Economic Outlooks 1999–2015. Washington D.C.: IMF.
• Jurek, M. (2011). The fall of the vanishing interim regime hypothesis. Towards a new paradigm of the choice of the exchange rate regimes. Berlin, Germany: VDM Verlag Dr. Müller.
• Klein, M.W., Shambaugh, J.C. (2015), Rounding the Corners of the Policy Trilemma: Sources of Monetary Policy Autonomy. American Economic Journal: Macroeconomics, 7(4), 33-66
• Lucas, R. (1990). Why Doesn’t Capital Flow from Rich to Poor Countries. American Economic Review, 80(2), 92–96.
• Mussa, M., Masson, P., Swoboda, A., Jadresic, E., Mauro, P., Berg, A. (2000). Exchange Rate Regimes in an Increasingly Integrated World Economy. IMF Occasional Papers, 193. Retrieved from https://www.imf.org/external/pubs/ft/op/193/index.HTM.
• Obstfeld, M., Taylor, A.M., International Monetary Relations: Taking Finance Seriously. The Journal of Economic Perspectives, 31(3), 3-28.
• Obstfeld, M., Shambaugh, J.C., Taylor, A.M. (2010), Financial Stability, the Trilemma, and International Reserves. American Economic Journal: Macroeconomics, 2(2), 57-94.
• Ötker-Robe, I., Vávra, D. (2007). Moving to Greater Exchange Rate Flexibility. Operational Aspects Based on Lessons from Detailed Country Experiences. IMF Occasional Papers, 256. Retrieved from https://www.imf.org/external/pubs/ft/op/256/op256.pdf.
• Spahn H.-P. (2001). From Gold to Euro. On Monetary Theory and the History of Currency Systems. Berlin, Germany: Springer-Verlag.
• Visser, H. (2004). A Guide to International Monetary Economics. Third Edition. Exchange Rate Theories, Systems and Policies. Cheltenham, the United Kingdom: Edward Elgar.

Identifiers

DOI

10.18559/ebr.2018.4.3