 Are consistent pegs really more prone to currency crises?Taro Esaka Journal of International Money and Finance, 2014, vol. 44, issue C, 136-163 Abstract: This paper evaluates the treatment effect of consistent pegs (i.e., a policy in which countries actually adopt announced pegged regimes) on the occurrence of currency crises to examine whether consistent pegs are indeed more prone to currency crises than other regimes. Using matching estimators as a control for the self-selection problem of regime adoption, we find that countries with consistent pegs have a significantly lower probability of currency crises than countries with other exchange rate policies. More interestingly, we find that countries with consistent pegs have a significantly lower probability of currency crises than those with a “fear of announcing a peg” policy (i.e., a policy in which countries actually adopt pegged regimes but do not claim to have pegged regimes). The results stand up to a wide variety of robustness checks. Keywords: Exchange rate regimes; Currency crises; Speculative attacks; Consistent pegs; Self-selection bias; Matching estimators (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:44:y:2014:i:c:p:136-163 DOI: 10.1016/j.jimonfin.2014.02.003 Access Statistics for this article Journal of International Money and Finance is currently edited by J. R. Lothian More articles in Journal of International Money and Finance from Elsevier |
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