e-journal
Classifying international aspects of currency regimes
There has been significant interest in the classification of exchange rate regimes in order
to investigate a wide range of hypotheses. Studies of the effects of exchange rate regimes on crises and
other aspects of economic performance can have important implications for policy choices. The paper
provides a guide to the major new large data sets that classify exchange rate regimes and to critically
analyze important methodological issues.
Design/methodology/approach – The study surveys and critiques the literature and provides
theoretical analysis of major issues involved in classifying exchange rate regimes.
Findings – The study finds that all of the new data sets have problems but some have more
problems than others and several of them are substantial improvements on what was previously
available. It is also shown that the best ways to classify depend on the issue being addressed and that
for detailed studies variants of measures using the concept of exchange market pressure are the most
promising. Directions for future research are also discussed.
Originality/value – The paper makes researchers aware of the new data sets that are available and
discusses their strengths and weaknesses. It also presents original analysis of several of the major
conceptual issues involved in classifying exchange rate regimes.
Keywords Foreign exchange, International finance, International economics,
Open economy macroeconomics, International trade
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