Gai, Prasanna; Tan, Kang-yong - Hong Kong Institute for Monetary Research (HKIMR), … - 2004
This paper examines how the choice of exchange rate regime can signal financial rectitude and, in so doing, influence a country¡¦s ability to borrow internationally in domestic currency. We develop a model in which the constant probability of a ¡¥type change¡¦ creates incentives for...