We use a sample of 140 countries to study empirically how a country's characteristics are associated with its choice of an exchange rate regime. When countries are classified according to their current exchange rate arrangements, we observe that small countries with low diversification of...

The paper studies empirically how different country characteristics are associated with the choice of a country's exchange rate regime. The sample consists of 140 economies, both developing and industrialized nations. When countries are classified according to their current exchange rate...