How to exit from fixed exchange rate regimes?

Aşıcı A. A., Ivanova N., Wyplosz C.

INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS, cilt.13, sa.3, ss.219-246, 2008 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 13 Sayı: 3
  • Basım Tarihi: 2008
  • Doi Numarası: 10.1002/ijfe.340
  • Dergi Adı: INTERNATIONAL JOURNAL OF FINANCE & ECONOMICS
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.219-246
  • Anahtar Kelimeler: exchange rate regimes, currency crises, exchange rate policy, capital controls, macroeconomic policies
  • İstanbul Teknik Üniversitesi Adresli: Evet

Özet

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 occurs 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. Copyright (c) 2007 John Wiley & Sons, Ltd.