How to Exit From Fixed Exchange Rate Regimes?

Ahmet Asici; Nadezhda Ivanova; Charles Wyplosz ()
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Ahmet Asici; Nadezhda Ivanova; Charles Wyplosz: IUHEI, The Graduate Institute of International Studies, Geneva
Authors registered in the RePEc Author Service: Charles Wyplosz, Nadezhda Stanislavovna Ivanova and Ahmet Atil Asici ()

No 03-2005, IHEID Working Papers from Economics Section, The Graduate Institute of International Studies

Abstract: This paper improves upon the recently developed literature on exits from fixed exchange rate regimes in three ways: 1) It allows for two indicators for post-exit macroeconomic conditions, the change in the exchange rate and the change in the output gap; 2) it tests whether the distinction between orderly and disorderly exit is statistically justified, and concludes that it is not; 3) it deals with the sample selection problem. The results, subject to extensive sensitivity analysis, suggest that post-exits are better when depegging occur in good macroeconomic conditions - an unnatural move for most policymakers - when world interest rates decline and in the presence of capital controls. Importantly, “good” macroeconomic policies do not seem to help with post-exit performance.

Keywords: exchange rate regimes; macroeconomic policy (search for similar items in EconPapers)
Pages: 36
Date: 2005-06-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: How to exit from fixed exchange rate regimes? (2008)
Working Paper: How to Exit from Fixed Exchange Rate Regimes (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:gii:giihei:heiwp03-2005

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