Better two eyes than one: A synthesis classification of exchange rate regimes

Cécile Couharde () and Carl Grekou ()
Additional contact information
Carl Grekou: CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

Working Papers from HAL

Abstract: This paper proposes a new de facto classification of exchange rate regimes, the synthesis classification. This framework offers several advantages over existing de facto classifications. First, it provides a unified framework that integrates the most divergent classifications, the RR and LYS classifications, not only achieving broader coverage but also encompassing a wide spectrum of exchange regimes. Second, it fits better with the historical developments of exchange rate regimes in the post-Bretton Woods era. Among others, it brings a nuanced perspective on the so-called hollowing-out hypothesis by showing that the evolution of de facto regimes —especially in emerging economies since the late 1990s— has essentially involved a shift toward more tightly "managed" intermediate regimes, rather than a move away from them. As an illustration of the insightfulness of our classification, we empirically revisit the relationship between currency crises and exchange rate regimes. Our classification not only associates a higher probability of currency crisis with both intermediate and floating regimes, but also shows better statistical performances in predicting currency crises compared to other classifications.

Keywords: Currency crisis; De facto classifications; Exchange rate regimes; Probit model; ROC analysis (search for similar items in EconPapers)
Date: 2021
Note: View the original document on HAL open archive server: https://hal.science/hal-04752826v1
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hal.science/hal-04752826v1/document (application/pdf)

Related works:
Journal Article: Better two eyes than one: A synthesis classification of exchange rate regimes (2024)
Working Paper: Better Two Eyes than One: A Synthesis Classification of Exchange Rate Regimes (2021)
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:hal:wpaper:hal-04752826

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().