NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Does the Nominal Exchange Rate Regime Matter?

download in pdf format
   (1605 K)

email paper

Atish R. Ghosh, Anne-Marie Gulde, Jonathan D. Ostry, Holger C. Wolf

NBER Working Paper No. 5874
Issued in January 1997
NBER Program(s):   IFM

The relevance of the exchange rate regime for macroeconomic performance remains a key issue in international macroeconomics. We use a comprehensive dataset covering nine regime-types for one hundred forty countries over thirty years to examine the link between the regime, inflation, and growth. Two sturdy stylized facts emerge. First, inflation is both lower and more stable under pegged regimes, reflecting both slower money supply and faster money demand growth. Second, real volatility is higher under pegged regimes. In contrast, growth varies only slightly across regimes, though investment is somewhat higher and trade growth somewhat lower under pegged regimes. Pegged regimes are thus characterized by lower inflation but more pronounced output volatility.

This paper is available as PDF (1605 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us