EconPapers    
Economics at your fingertips  
 

Currency Fluctuations, Liability Dollarization, and the Choice of Exchange Rate Regimes in Emerging Markets

Patrick Osakwe

Staff Working Papers from Bank of Canada

Keywords: Exchange; rate; regimes (search for similar items in EconPapers)
JEL-codes: E52 F31 F41 (search for similar items in EconPapers)
Pages: 32 pages Abstract: Traditional models of exchange rate regimes ignore the destabilizing effects of sharp and unanticipated exchange rate movements. Recent research, however, has shown that these movements have real costs in emerging markets owing to liability dollarization, financial fragility, or balance-sheet vulnerabilities. This paper evaluates the performance of an emerging-market economy under a credibly fixed-rate, a collapsing fixed-rate, and a flexible-rate regime using a speculative attack model that takes into account the destabilizing effects of unanticipated movements in exchange rates. The model is applied to South Korea to determine the dominant exchange rate regime.
Date: 2002
New Economics Papers: this item is included in nep-fin and nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.bankofcanada.ca/wp-content/uploads/2010/02/wp02-6.pdf

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:bca:bocawp:02-6

Access Statistics for this paper

More papers in Staff Working Papers from Bank of Canada 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2023-01-25
Handle: RePEc:bca:bocawp:02-6