This paper offers a theoretical explanation for the determination of exchange rates under specific conditions which can/could be found in some OECD and newly industrialised countries. In an Obstfeld (1994) framework extended to incorporate government expropriation reneging on a fixed exchange...

This work evaluates whether or not the interest rate rules under different exchange rate regimes lead to a REE that is both locally determinate and stable under adaptive learning by private agents. I find that monetary interdependence among countries is crucial for the determinacy and learning...

This paper discusses desirable exchange rate regimes and how countries can shift from their current regimes to these regimes over the medium term. We demonstrate the superiority of a basket-peg regime with the basket weight rule over a floating regime with the interest rate rule or the money...

This paper discusses desirable exchange rate regimes and how countries can shift from their current regimes to these regimes over the medium term. We demonstrate the superiority of a basket-peg regime with the basket weight rule over a floating regime with the interest rate rule or the money...

This paper argues that fixed exchange rate regimes are preferred by the international sector only if they are adopted in economies endowed with anti-inflationary policy-making institutions (i.e., independent central banks). Cross-national firm-level data gives strong support to this claim.

We extend the Modigliani-Miller Theorem to the composition of the public debt and show that in a deterministic model the structure of a government's assets and liabilities is undetermined. Hence, a floating exchange rate regime can implement any attainable competitive equilibrium. Concerning...

This paper analyzes the optimal transition of the exchange rate regime in the People’s Republic of China (PRC). How the PRC can successfully reach the desired regime—whether a basket peg or floating regime—from the current dollar-peg regime remains a major question. To...

This study will demonstrate, through an econometric model in time series, if and how the Chinese basket peg has changed in relation to the weight that the European single currency holds within it. Specifically, utilizing Frankel's (1994) econometric model, as revisited by Mele (2010) enriched by...

This paper deals with the issue of the exchange rate regime that China has established since 2005, when it announced a move away from the US dollar peg. In fact, from that date, the RMB was managed with reference to a basket of currencies rather than being pegged to the dollar; the exchangerate,...

Set in the context of the recent theoretical and policy debates on appropriate exchange rate regimes for emerging market economies in a world of free capital mobility, the paper attempts to present the case for an intermediate exchange rate regime, drawing on recent theoretical and empirical...