Verifying exchange rate regimes

• 成果类型: Article; Proceedings Paper
• 署名作者: Frankel, JA; Fajnzylber, E; Schmukler, SL; Servén, L
• 署名单位: The World Bank; University of California System; University of California Los Angeles; National Bureau of Economic Research; Harvard University
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/S0304-3878(01)00167-5
• 发表日期: 2001
• 页码: 351-386
• 关键词: verifiability; TRANSPARENCY; Exchange rate regimes; basket peg; bands; target zone; floating

摘要

Credibility and transparency are at the core of the current debate on exchange rate regimes. Among the reasons why intermediate regimes have fallen out of favor, a possibly important one is that they are not transparent: it is difficult to verify them. This paper investigates how difficult it is for investors to verify from observable data if the authorities are in fact following the exchange rate regime that they claim to be following. Of the various intermediate regimes, we focus on the case of basket pegs with bands. Statistically, it can take a surprisingly long span of data for an econometrician or an investor to verify whether such a regime is actually in operation. We find that verification becomes more difficult as the regime's bands widen and/or more currencies enter in the basket peg. At the other extreme, we also analyze regimes announced as free-floating, and find that in some cases the observed exchange rate data are consistent with the announced regime. (C) 2001 Elsevier Science B.V. All rights reserved.