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Currency blocs in the 21st century

Christoph Fischer

No 2011,12, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

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 US 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: Anchor Currency Choice; Nested Logit; Exchange Rate Regime Classification; Additive Random Utility Model; Currency Bloc Equilibrium (search for similar items in EconPapers)
JEL-codes: F02 F31 F33 E42 C25 (search for similar items in EconPapers)
Date: 2011
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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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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdp1:201112

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