Are Pegged and Intermediate Regimes More Crisis Prone?

Andrea Bubula and Inci Ötker-Robe ()

No 2003/223, IMF Working Papers from International Monetary Fund

Abstract: This paper provides evidence on the susceptibility of different types of exchange rate regimes to currency crises during 1990-2001. It explores the incidence of crises, identified as episodes of severe exchange market pressure, to seek evidence on whether pegged regimes are more crisis prone than floating regimes and on whether certain types of pegged regimes are more crisis prone than others. The paper finds that pegged regimes, as a whole, have been characterized by a higher incidence of crises than floating regimes, for countries that are more integrated with international capital markets; and that intermediate regimes (mainly soft pegs and tightly-managed floating regimes) have been more crisis prone than both hard pegs and other floating regimes-a view consistent with the bipolar view of exchange rate regimes. The degree of crisis proneness seems to be broadly similar across different types of intermediate regimes.

Keywords: WP; government; intermediate regime; exchange rate regime; exchange rate; bipolar view; pegged regimes; hard pegs; soft pegs; floats; intermediate regimes; currency crises; exchange market pressure; exchange regime classification; regime data; regime spectrum; regime continuum; floating regime; Exchange rate arrangements; Conventional peg; Crawling peg; Exchange rates; Currencies (search for similar items in EconPapers)
Pages: 36
Date: 2003-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=16986 (application/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:imf:imfwpa:2003/223

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().