NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Aasim M. Husain

Research Department, International Monetary Fund
700 19th Street, NW
Washington, DC 20431

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NBER Working Papers and Publications

August 2004Exchange Rate Regime Durability and Performance in Developing Countries Versus Advanced Economies
with Ashoka Mody, Kenneth S. Rogoff: w10673
Drawing on new data and advances in exchange rate regimes' classification, we find that countries appear to benefit by having increasingly flexible exchange rate systems as they become richer and more financially developed. For developing countries with little exposure to international capital markets, pegs are notable for their durability and relatively low inflation. In contrast, for advanced economies, floats are distinctly more durable and also appear to be associated with higher growth. For emerging markets, our results parallel the Baxter and Stockman classic exchange regime neutrality result, though pegs are the least durable and expose countries to higher risk of crisis.

Published: Husain, Aasim M., Ashoka Mody and Kenneth S. Rogoff. "Exchange Rate Regime Durability And Performance In Developing Versus Advanced Economies," Journal of Monetary Economics, 2005, v52(1,Jan), 35-64.

 
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