Is the exchange rate regime really irrelevant for external adjustment?
Atish Ghosh (),
Mahvash Qureshi and
Charalambos Tsangarides ()
Economics Letters, 2013, vol. 118, issue 1, 104-109
We argue that evidence on whether floating exchange rates facilitate external adjustment is contradictory because existing regime classifications do not adequately capture exchange rate flexibility relevant to external adjustment. Using a trade-weighted bilateral exchange rate volatility measure, we show that exchange rate flexibility indeed matters for current account dynamics.
Keywords: Current account dynamics; Exchange rate regime; Bilateral exchange rate volatility (search for similar items in EconPapers)
JEL-codes: F32 F41 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:1:p:104-109
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