Using a large sample of developing and industrialized economies during 1970-1999, this paper explores whether the choice of exchange rate regime affects the sensitivity of local interest rates to international interest rates. In most cases, we cannot reject full transmission of international...

This paper considers policies of the industrialized countries, as they pertain to crises in emerging markets. These fall into three areas: (1) their own macroeconomic policies, which determine the global financial environment; (2) their role in responding to crises when they occur, particularly...

Written for a PIIE conference on the 50th anniversary of floating exchange rates, this paper deals with possible alternatives to a unipolar dollar-based system. It considers (1) measures of international currency use; (2) potential challengers to the dollar; (3) network externalities; and (4) the...

We begin by examining determinants of aggregate foreign exchange reserve holdings by central banks (size of issuing country's economy and financial markets, ability of the currency to hold value, and inertia). But understanding the determination of reserve holdings probably requires going beyond...

This paper offers a possible theoretical rationale - currently lacking - for the proposition that intermediate exchange rate regimes are no longer viable. According to this proposition, countries are being pushed to the ldquo;corners,rdquo; the extremes of either free floating or firm fixing. We...