A comparison of exchange rate regime choice in emerging markets with advanced and low income nations for 1999–2011

Amit Ghosh

International Review of Economics & Finance, 2014, vol. 33, issue C, 358-370

Abstract: The recent global financial crisis has sparked a renewal of debate on the choice of exchange rate regimes. Creating a tripartite regime classification, the present study examines their determinants for 137 nations spanning the period 1999–2011. I find that trade openness, economic development, foreign-currency liabilities, and foreign exchange reserve holdings increase the likelihood of choosing a fixed-type regime in emerging markets while economic size, export concentration ratios and financial development lower such a chance. Capital controls, inflation differential with an anchor nation and land size significantly influence regime-choice in advanced and low income countries, but are largely insignificant in emerging markets.

Keywords: Advanced economies; Emerging markets; Exchange rate regimes; Regime-flexibility; Low income countries (search for similar items in EconPapers)
JEL-codes: C25 F33 F41 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:33:y:2014:i:c:p:358-370

DOI: 10.1016/j.iref.2014.02.008

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