Are We Floating Yet? Duration of Fixed Exchange Rate Regimes

Menna Bizuneh ()
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Menna Bizuneh: Pitzer College

Eastern Economic Journal, 2022, vol. 48, issue 1, No 3, 63-89

Abstract: Abstract This study examines the duration of fixed exchange rate regimes to determine the factors that impact the probability of an exit from a peg. Using de facto exchange rate regime classification, we find that duration of a peg is non-monotonic. The results of the semi-parametric proportional hazard model highlight that GDP growth and openness decrease the probability of an exit from a peg, while growing unemployment and increasing claims on government increase the likelihood of abandoning a peg. The negative impact of economic growth on the hazard rate is robust when we use marginal risk analysis and net foreign assets and inflation are found to influence the pegged regime duration.

Keywords: Exchange rate regimes; Survival analysis; Marginal risk analysis (search for similar items in EconPapers)
JEL-codes: E42 F31 F33 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pal:easeco:v:48:y:2022:i:1:d:10.1057_s41302-021-00206-7

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DOI: 10.1057/s41302-021-00206-7

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