Friedman Redux : external adjustment and exchange rate flexibility /

Friedman Redux : external adjustment and exchange rate flexibility /

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Bibliographic Details
Author / Creator:Ghosh, Atish R., (IMF Staff), author.
Imprint:[Washington, D.C.] : International Monetary Fund, ©2014.
Description:1 online resource (43 pages) : color illustrations.
Language:English
Series:IMF working paper ; WP/14/146
IMF working paper ; WP/14/146.
Subject:
Foreign exchange rates.
Balance of trade.
Balance of payments.
Balance of payments.
Balance of trade.
Foreign exchange rates.
Electronic books.
Format: E-Resource Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/12503163
Hidden Bibliographic Details
Other authors / contributors:Qureshi, Mahvash Saeed, (IMF Staff), author.
Tsangarides, Charalambos G., (IMF Staff), author.
International Monetary Fund. Research Department, issuing body.
Notes:"Research Department"--Page 2 of pdf.
"August 2014"--Page 2 of pdf.
Includes bibliographical references (pages 26-27).
Online resource; title from pdf title page (IMF.org Web site, viewed on August 13, 2014).
Summary:Milton Friedman argued that flexible exchange rates would facilitate external adjustment. Recent studies find surprisingly little robust evidence that they do. We argue that this is because they use composite (or aggregate) exchange rate regime classifications, which often mask very heterogeneous bilateral relationships between countries. Constructing a novel dataset of bilateral exchange rate regimes that differentiates by the degree of exchange rate flexibility, as well as by direct and indirect exchange rate relationships, for 181 countries over 1980--2011, we find a significant and empirically robust relationship between exchange rate flexibility and the speed of external adjustment. Our results are supported by several "natural experiments" of exogenous changes in bilateral exchange rate regimes. --Abstract.
Table of Contents:
  • Cover; Contents; I. Introduction; II. Bilateral Exchange Rate Relationships; A. Possible Configurations; B. Regime Classification; III. Exchange Rate Regimes and External Balances: Some Stylized Facts; IV. External Dynamics: Estimation Strategy and Results; A. Composite Regime Classifications; B. Bilateral Regime Classification; C. Natural Experiments; V. Extensions; A. Threshold Effects; B. Corrective Movements in Exchange Rate; C. Financial Openness and External Dynamics; D. Sensitivity Analysis; VI. Conclusion; References; Tables.
  • 1. Bilateral Real Exchange Rate Volatility and Exchange Rate Regimes, 1980-20112. Distribution of Bilateral Exchange Rate Regimes with IMF Classification, 1980-2011; 3. Transition Probabilities: Composite Regime Classification, 1980-2011; 4. Transition Probabilities: Bilateral Regime Classification, 1980-2011; 3. Classifying Bilateral Exchange Rate Regime Relationships; 4. Bilateral Exchange Rate Volatility and Exchange Rate Regimes; 5. Transition Probabilities by Decade: Bilateral Regime Classification, 1980-2011.
  • 6. External Dynamics: Composite Exchange Rate Regime Classifications, 1980-20117. External Dynamics: Bilateral Exchange Rate Regime Classification, 1980-2011; 8. Bilateral Direct and Indirect Pegs, 1980-2011; 9. External Dynamics: Natural Experiments; 10. External Dynamics: Threshold Effects, 1980-2011; 11. Real Exchange Rate Corrective Movement, 1980-2011; 12. External Dynamics and Financial Openness, 1980-2011; 13. External Dynamics: Sensitivity Analysis, 1980-2011; Appendix A: Data and Summary Statistics; Figures.

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