Exchange Rate Regimes in the Modern Era: Fixed, Floating, and Flaky

Andrew K Rose, 1 September 2010

Exchange rates may be one of a country's most important asset prices, and as such worthy of increased scholarly attention, argues Andrew Rose in CEPR Discussion Paper 7987. The paper presents a critical review of Klein and Shambaugh's new book, Exchange Rate Regimes in the Modern Era, and explores the theoretical and empirical challenges of comparing exchange rate regimes.

Vox users can download CEPR Discussion Paper 7987 for free here. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.

Journalists are entitled to free DP downloads on request; please contact pressoffice@cepr.org. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.

URL: http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=7987
Topics: Exchange rates
Tags: exchange rate regime

5467 reads

The global financial crisis: Why were some countries hit harder?

James P. Walsh, Gaston Gelos, Robert Rennhack, S. Pelin Berkmen, 28 March 2010

Despite the global reach of the financial crisis, some countries fared better than others. This column argues that this was due to differences in trade or financial openness, underlying vulnerabilities to external forces, or the strength of their economic policies.

The global financial crisis that originated in the advanced economies has dealt a severe blow to growth in the rest of the world over the last two years. But why did some countries fare better than others?

To examine this question, researchers have started to take a look at the cross-country evidence:

Topics: Global crisis
Tags: exchange rate regime, leverage, macroeconomic policies

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27894 reads

Does exchange rate flexibility speed up current account adjustment?

Menzie D. Chinn , Shang-Jin Wei, 1 December 2008

This column examines whether the pace at which a country’s current account balance adjusts to its average value depends upon the exchange rate regime. The benefits of exchange rate flexibility for current account adjustment are found to be greatly exaggerated. By some measures, a fixed exchange rate facilitates faster adjustment.

“We also agreed that an orderly unwinding of global imbalances, while sustaining global growth, is a shared responsibility involving... greater exchange rate flexibility...”
G20 Communiqué, Meeting of Finance Ministers and Central Bank Governors, Cape Town, South Africa, November 17-18, 2007.

Topics: Exchange rates
Tags: current account, exchange rate regime

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15075 reads

Signs of modest but steady increase in flexibility in Chinese exchange rate regime

Jeffrey Frankel, Shang-Jin Wei, 23 April 2007

The authors of CEPR DP6264 analyse the precise nature of China's exchange rate regime from July 2005 to early 2007 and make some surprising discoveries.

The nature of the regime governing the Chinese exchange rate is a key global monetary issue that bears directly on what may well become one of the key features of international political economy in the 21st century: the rise of China and its likely long-run challenge to the hegemony of the United States. But what do we know about the nature of the regime?

Journalists are entitled to free DP downloads on request; please contact pressoffice@cepr.org. To learn more about subscribing to CEPR's Discussion Paper Series, please visit the CEPR website.

URL: http://www.cepr.org/DP6264
Topics: Exchange rates
Tags: basket peg, China, exchange rate regime