Economics at your fingertips  

Determining global currency bloc equilibria: An empirical strategy based on estimates of anchor currency choice

Christoph Fischer

Journal of International Money and Finance, 2016, vol. 64, issue C, 214-238

Abstract: The study presents an empirical strategy for determining global currency bloc equilibria. The procedure includes, first, a nested logit estimation of the combined determinants of currency regime and anchor currency choice; second, a test for a welfare-maximizing regime decision, in which estimates of the relative welfare of alternative regimes are inferred from the results of the first step estimation; and third, taking the path dependency of regime choice into account, a currency bloc equilibrium is derived. In equilibrium, the dollar bloc is somewhat smaller and the euro bloc larger than at present. Counterfactual exercises assess among others the potential for a renminbi bloc.

Keywords: Currency bloc equilibrium; Anchor currency choice; Nested logit; Additive random utility model (search for similar items in EconPapers)
JEL-codes: F02 F31 F33 E42 C25 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
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:

DOI: 10.1016/j.jimonfin.2016.02.019

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
Bibliographic data for series maintained by Haili He ().

Page updated 2020-05-02
Handle: RePEc:eee:jimfin:v:64:y:2016:i:c:p:214-238