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Currency blocs in the 21st century

Christoph Fischer

No 87, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: Based on a classification of countries and territories according to their regime and anchor currency choice, the study considers the two major currency blocs of the present world. A nested logit regression suggests that long-term structural economic variables determine a given country's currency bloc affiliation. The dollar bloc differs from the euro bloc in that there exists a group of countries that peg temporarily to the U.S. dollar without having close economic affinities with the bloc. The estimated parameters are consistent with an additive random utility model interpretation. A currency bloc equilibrium in the spirit of Alesina and Barro (2002) is derived empirically.

Keywords: Foreign exchange; International finance (search for similar items in EconPapers)
Pages: 60 pages
Date: 2011
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-opm
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Working Paper: Currency blocs in the 21st century (2012) Downloads
Working Paper: Currency blocs in the 21st century (2011) Downloads
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