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HOW RELIABLE ARE DE FACTO EXCHANGE RATE REGIME CLASSIFICATIONS?
Author(s) -
Eichengreen Barry,
RazoGarcia Raul
Publication year - 2013
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1456
Subject(s) - de facto , economics , openness to experience , exchange rate , emerging markets , exchange rate regime , monetary economics , capital market , financial market , developing country , interest rate parity , capital flows , international economics , macroeconomics , finance , market economy , political science , psychology , social psychology , law , economic growth , liberalization
We analyze disagreements over de facto exchange‐rate‐regime classifications using three popular de facto regime data series. While there is a moderate degree of concurrence across classifications, disagreements are not uncommon, and they are not random. They are most prevalent in middle‐income countries (emerging markets) and low‐income (developing) countries as opposed to advanced economies. They are most prevalent for countries with well‐developed financial markets, low reserves and open capital accounts. This suggests caution when attempting to relate the exchange rate regime to financial development, the openness of the financial account, and reserve management and accumulation decisions. Copyright © 2012 John Wiley & Sons, Ltd.