Exchange Rate Regime Choice in Historical Perspective

Michael Bordo

No 9654, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Exchange rate regime choice has evolved considerably in the past 100 years. At the beginning of the twentieth century the choice was obvious - - join the gold standard, all the advanced countries have done it. Floating exchange rates and fiat money are only for profligate countries. At the beginning of the twenty-first century, the choice is also becoming more obvious - - go to floating exchange rates, all the advanced countries have done it. Moreover in both eras, the emerging markets of the day tried to emulate the advanced countries but in many cases had great difficulties in doing so. What happened in the past century to lead to this tour de force? In this paper I survey the issue of exchange rate regime choice from the perspective of both the advanced countries and the emergers taking an historical perspective. I first survey the theoretical issues beginning with a taxonomy of regimes. I then examine the empirical evidence on the delineation of regimes and their macro performance. The penultimate section provides a brief history of monetary regimes in advanced and emerging countries. The conclusion considers the case for managed float for today's emergers.

JEL-codes: F33 N20 (search for similar items in EconPapers)
Date: 2003-04
New Economics Papers: this item is included in nep-fin, nep-his and nep-ifn
Note: DAE IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (55)

Published as Michael D. Bordo, 2003. "Exchange Rate Regime Choice in Historical Perspective," IMF Working Papers, vol 03(160).

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