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

Andrew Rose

No 7987, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper provides a selective survey of the incidence, causes, and consequences of a country?s choice of its exchange rate regime. I begin with a critical review of Klein and Shambaugh?s (2010) book Exchange Rate Regimes in the Modern Era, and then proceed to provide an alternative overview of what the economics professions knows and needs to know about exchange rate regimes. While a fixed exchange rate with capital mobility is a well-defined monetary regime, floating is not; thus, it is unclear whether it is theoretically sensible to compare countries across exchange rate regimes. This comparison is quite difficult to make empirically. It is often hard to figure out what the exchange rate regime of a country is in practice, since there are multiple conflicting regime classifications. More importantly, similar countries choose radically different exchange rate regimes without substantive consequences for macroeconomic outcomes like output growth and inflation. That is, the profession knows surprisingly little about either the causes or consequences of national choices of exchange rate regimes. But since the consequences of these choices are small, understanding their causes is of only academic interest.

Keywords: Cause; Consequence; Empirical; Flexible; Government; Incidence; Monetary; Policy (search for similar items in EconPapers)
JEL-codes: E58 F33 (search for similar items in EconPapers)
Date: 2010-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://cepr.org/publications/DP7987 (application/pdf)

Related works:
Journal Article: Exchange Rate Regimes in the Modern Era: Fixed, Floating, and Flaky (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:7987

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP7987

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().