The choice of exchange rate regime is considered for a small open economy. Assuming that different forms of fixed exchange rate regimes involve different costs of reneging, it is shown that one potential beneficial aspect of joining a monetary union with a common currency is that it is less...

We investigate dollar-sterling exchange rate expectations during the period 1890-1908. We show that the dollar faced a 'Peso problem' in that for much of the period financial markets expected it to depreciate against sterling, but this never in fact happened - i.e. expectations were persistently...

In order to examine the new RMB exchange rate regime rigorously, we employ the STARTZ model to investigate the behavior of RMB NEER from mid-2006 to mid-2008. We find that a managed float with a target central parity and without an explicit band best describes the daily movement of the exchange...

The framework of "one currency, two markets" makes China's currency market quite unique compared to its Western counterparts. In this study, we characterize the linkage between the onshore and o shore Renminbi exchange rates, and estimate the effect of the recent Renminbi market reforms against...