Exchange rate regime durability and performance in developing versus advanced economies

Husain, Aasim M.; Mody, Ashoka; Rogoff, Kenneth

doi:10.1016/j.jmoneco.2004.07.001

Cited by 280 publications

(178 citation statements)

References 36 publications

(48 reference statements)

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“…The establishment of the euro zone is shown as a shift by ERM countries to from exchange rate targeting to a multiple targets framework. 6 IMF discussions with member states in 2006 suggested that the number of inflation targeters in developing and emerging market economies was likely to increase four-fold over the next decade, consistent with the estimate by Husain, Mody, and Rogoff (2005) that the number of countries with exchange rate pegs may almost halve in the next 10-15 years. …”

mentioning

confidence: 65%

Inflation Targeting At 20: Achievements and Challenges

Roger

2009

IMF Working Papers

115

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This paper provides an overview of inflation targeting frameworks and macroeconomic performance under inflation targeting. Inflation targeting frameworks are generally quite similar across countries, and a broad consensus has developed in favor of "flexible" inflation targeting. The evidence shows that, although inflation target ranges are missed frequently in most countries, the inflation and growth performance under inflation targeting compares very favorably with performance under alternative frameworks. Inflation targeters also tentatively appear to be coping better with the commodity price and financial shocks in 2007-2009 than non-inflation targeters. Key issues going forward include adapting inflation targeting to emerging market and developing countries, and incorporating financial stability issues into the framework.

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confidence: 65%

Inflation Targeting At 20: Achievements and Challenges

Roger

2009

IMF Working Papers

115

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“…similar to Husain et al (2005), augmented with the trilemma effectiveness measure. Descriptive statistics for all variables are presented in Table 2.…”

Section: Methodsmentioning

confidence: 99%

The international policy trilemma in the post-Bretton Woods era

Mandilaras

2015

Journal of Macroeconomics

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The international macroeconomic policy trilemma suggests that despite the appeal of exchange rate stability, financial account openness and monetary sovereignty, these cannot be achieved simultaneously. Using elements of Euclidean geometry, this paper proposes a new method for testing the trilemma and finds considerable evidence in support of it. Further tests indicate that, on average, policy configurations are not on the trilemma constraint, i.e. there is a degree of 'trilemmaineffectiveness', which is costly for real output growth and price inflation. It is shown that these costs can be attributed to limited exchange rate stability and financial account openness.

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“…However, it has to be taken into account, that strongly regulated FX markets may be much more exposed to event risks and tail events, respectively, like for example currency crisis and, most importantly in the context of the results of this study, shifts in the FX regimes (see, for example, Husain, Mody, and Rogoff, 2005;Fiess and Shankar, 2009;Abildgren, 2014). Having said that, further research is necessary and should, particularly, focus on the predictability of regime shifts in managed exchange rate systems and currency boards, the credibility of fixed exchange rate regimes as well as the influence thereof on forecast accuracy and rationality, respectively.…”

Section: Discussionmentioning

confidence: 99%

Predicting Exchange Rates in Asia: New Insights on the Accuracy of Survey Forecasts

Kunze

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper evaluates aggregated survey forecasts with forecast horizons of 3, 12, and 24 months for the exchange rates of the Chinese yuan, the Hong Kong dollar, the Japanese yen, and the Singapore dollar vis-à-vis the US dollar using common forecast accuracy measures. Additionally, the rationality of the exchange rate predictions are assessed utilizing tests for unbiasedness and efficiency. All investigated forecasts are irrational in the sense that the predictions are biased. However, these results are inconsistent with an alternative measure of rationality based on methods of applied time series analysis. Investigating the order of integration of the time series and using cointegration analysis, empirical evidence supports the conclusion that the majority of forecasts are rational. Regarding forerunning properties of the predictions, the results are less convincing, with shorter term forecasts for the tightly managed USD/CNY FX regime being one exception. As one important evaluation result, it can be concluded, that the currency regime matters for the quality of exchange rate forecasts.JEL classification: F31, F37, G17, O24.

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Exchange rate regime durability and performance in developing versus advanced economies

Cited by 280 publications

References 36 publications

Inflation Targeting At 20: Achievements and Challenges

Inflation Targeting At 20: Achievements and Challenges

The international policy trilemma in the post-Bretton Woods era

Predicting Exchange Rates in Asia: New Insights on the Accuracy of Survey Forecasts

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