Exchange Rate Regime Choice and Currency Crises

Posted: 13 Mar 2012

See all articles by Ahmet Atil Asici

Ahmet Atil Asici

University of Geneva - Graduate Institute of International Studies (HEI)

Date Written: March 12, 2012

Abstract

Exchange rate regime choice is not exogenous, but it depends on the structural, political and financial features of countries. However, it is often the case that the regime actually pursued and the one that is imposed by country features do not match one to one. The existing empirical crisis models do not take fully into account the regime in which the crisis unfolded. The aim of this paper is to incorporate the appropriateness of the regime choice into the standard currency crisis model. The results show that the odds of crisis increase significantly in countries which have chosen regimes inconsistently.

Keywords: Exchange rate regime choice, Currency crisis, Multinomial crisis model

JEL Classification: F31, F41

Suggested Citation

Asici, Ahmet Atil, Exchange Rate Regime Choice and Currency Crises (March 12, 2012). Economic Systems, Vol. 35, No. 3, 2011, Available at SSRN: https://ssrn.com/abstract=2020341

Ahmet Atil Asici (Contact Author)

University of Geneva - Graduate Institute of International Studies (HEI) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

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