Motivated by the potential contribution of China's unilateral peg to asset price inflation in the US before the financial crisis of 2007-2009, this paper studies the effect of alternative exchange rate regimes (flexible versus fixed) on the response of asset prices to economic shocks. I use a...

Financial markets in Euroland differ from those of a national monetary union in two regards. First, capital markets in general and banking markets in particular show a greater degree of segmentation than national financial markets as a result of information costs and regulatory barriers to full...