This paper investigates inconsistencies between countries' official exchange rate regime declarations (the so-called de jure exchange rate regimes) and their actual policy (de facto exchange rate regimes). These exchange rate regime gaps decrease the credibility of monetary policy and are...

Exchange rate regime choice is not exogenous, but it depends on the structural, political and financial features of countries. However, it is often the case that the regime actually pursued and the one that is imposed by country features do not match one to one. The existing empirical crisis...

This paper analyzes the optimal time to abandon a fixed exchange rate regime in response to a fiscal shock that renders the peg unsustainable. We consider three variants of an optimization-based first-generation speculative attack model. In the first variant there are exogenous costs of...

This paper explores the process of abandoning a fixed exchange rate regime during sudden stops in a small open economy. The Bank of Korea's exchange rate policy reports during the East Asian crisis suggest that its fixed exchange rate regime was forced to collapse due to the depletion of usable...

This paper studies a policy often used to defend a currency peg: raising short-term interest rates. The rationale for this policy is to stem demand for foreign reserves. Yet, this mechanism is absent from most monetary models. This paper develops a general equilibrium model with asset market...

The purpose of this paper is to test the common view on the actual exchange rate regime, using very simple but intuitive OLS regression models based on Frankel and Wei's work (1994). The results show that, firstly, East Asian countries including Korea have returned to the dollar peg or managed...