The size and timing of devaluations in capital-controlled economies

• 成果类型: Article; Proceedings Paper
• 署名作者: Flood, R; Marion, N
• 署名单位: International Monetary Fund; Dartmouth College
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/S0304-3878(97)00034-5
• 发表日期: 1997
• 页码: 123-147
• 关键词: devaluation; Fixed exchange rates

摘要

In this paper, we consider a policymaker in a stochastic environment who pegs the nominal exchange rate and adjusts the peg periodically so as to minimize the flow cost of real exchange-rate misalignment and the fixed cost of peg readjustment. Characterizing the real exchange rate as regulated Brownian motion permits the policymaker's problem to be solved for the optimal size and timing of devaluations. Using cross-sectional data on 80 peg episodes from seventeen Latin American countries over the 1957-1990 period, we find empirical support for the model's main predictions. (C) 1997 Elsevier Science B.V.