Determinants of the Exchange Rate Regime: A Time Series Analysis for Chile

Leon Javoer

International Economic Journal, 1999, vol. 13, issue 2, 89-102

Abstract: The objective of this paper is to examine the determinants of the exchange rate regime within a time series approach, in order to overcome limitations of the cross-section approach. The former approach is based upon the assumption that policy makers would not change the regime until the long term benefits would exceed the cost of the switch. This would imply some inertia in regimes that will be better captured by a time series analysis. The empirical results show that: (i) Chile opted captured by a time series analysis. The empirical results show that: (i) Chile opted for a fixed exchange rate regime as an anchor when domestic inflation was relatively high with respect to world inflation, and (ii) minimizing real consumption variability rather than real output variability was a dominant target for Chilean authorities, with domestic monetary disturbances favoring a more flexible arrangement, while real shocks were absorbed by changes in the balanced of payments supporting a fixed regime. [F31,F32]

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/10168739900000039 (text/html)
Access to full text is restricted to subscribers.

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: https://EconPapers.repec.org/RePEc:taf:intecj:v:13:y:1999:i:2:p:89-102

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RIEJ20

DOI: 10.1080/10168739900000039

Access Statistics for this article

International Economic Journal is currently edited by Jaymin Lee Editor

More articles in International Economic Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().