The exchange rate managements in crisis-experienced emerging market economies after the 1990s

Taguchi, Hiroyuki (2005): The exchange rate managements in crisis-experienced emerging market economies after the 1990s. Published in: Studies in Regional Science , Vol. 35, No. 4 (2005): pp. 887-907.

Abstract

This article examined the exchange rate managements in the crisis-experienced emerging market economies after the 1990s. First, we found that the exchange rate flexibility has increased from the pre-crisis period towards the post-crisis period under the “soft peg” regime. Second, we identified a structural change in the factors for determining a reference rate in exchange rate management from the pre-crisis period to the post-crisis period. Third, we found that East Asian countries, in their post-crisis exchange rate managements, might reduce US dollar dominance, while raising the other currencies’ weight, and further found that the countries who were not sensitive to inflation rates in their pre-crisis managements, might raise its sensitivity during the post-crisis period.

• Item Type: MPRA Paper
• Language: English
• Keywords: exchange rate, emerging market, financial crisis
• Subjects: F - International Economics > F3 - International Finance > F31 - Foreign Exchange

References

[1] ADB (Asian Development Bank), Asia’s Globalization Challenge, Asian Development Outlook 2001, 2001, pp. 161-201.

[2] Calvo, Guillermo A., and Carmen M. Reinhart, “Fear of Floating,” NBER Working Paper, No. 7993, 2000.

[3] Davidson, R., and J. MacKinnon, Estimation and Inference in Econometrics, Oxford University Press, 1993.

[4] Eichengreen, Barry, Toward a New International Financial Architecture: A Practical Post-Asia Agenda, Institute for International Economics, Washington, D.C., 1999.

[5] Fischer, Stanley, “Exchange Rate Regimes: Is the Bipolar View Correct?” This paper was prepared for the 2001 American Economic Association meetings, 2001.

[6] Frankel, Jeffrey A., Sergio Schmukler, and Luis Serven, “Verifiability and the Vanishing Exchange Rate Regime,” This paper was prepared for the Brookings Trade Forum 2000: Policy Challenges in the Next Millenium, Washington, D.C., April 27-28, 2000.

[7] Frankel, Jeffrey A., and S. J. Wei, “Yen Bloc or Dollar Bloc? Exchange Rate Policies in the East Asian Economies,” in Takatoshi Ito and Anne Krueger, eds. Macroeconomic Linkage: Savings, Exchange Rates, and Capital Flow, University of Chicago Press, 1994.

[8] French and Japanese Staff, “Exchange Rate Regimes for Emerging Market Economies,” Discussion Paper prepared for ASEM meeting, May 2002.

[9] IMF (International Monetary Fund), International Financial Statistics, June 2003, and previous issues, Washington, D.C., 2003.

[10] IMF (International Monetary Fund), Direction of Trade Statistics Yearbook, Washington, D.C., 2003.

[11] Ito, Takatoshi, “Growth, Crisis, and the Future of Economic Recovery in East Asia,” in Joseph E. Stiglitz and Shahid Yusuf, eds. Rethinking the East Asian Miracle, World Bank, Washington, D.C., 2001.

[12] Kawai, Masahiro, “Exchange Rate Arrangements in East Asia: Lessons from the 1997-98 Currency Crisis,” IMES Discussion Paper Series, September, 2002-E-17, 2002.

[13] Masson, Paul, Exchange Rate Regime Transitions, Brookings Institution, 2000.

[14] Matsuura, Katsumi, and Colin Mckenzie, Eviews niyoru Keiryou Keizai Bunseki (Econometric Analysis by Eviews, Toyo Keizai Shinpo Sha, Tokyo, 2001.

[15] Mckinnon, Ronald, “After the Crisis, the East Asian Dollar Standard Resurrected: an Interpretation of High-frequency Exchange Rate Pegging,” in Joseph E. Stiglitz and Shahid Yusuf, eds. Rethinking the East Asian Miracle, World Bank, Washington, D.C., 2001.

[16] Ohno, Kenichi, “Exchange Rate Management in Developing Asia: Reassessment of the Precrisis Soft Dollar Zone,” ADBI Working Paper, Asian Development Bank Institute, 1999.

[17] Reinhart, Carmen M., and Kenneth S. Rogoff, “The Modern History of Exchange Rate Arrangements: A Reinterpretation,” NBER Working Paper No. 8963, 2002.

[18] Summers, Lawrence, “Building an International Financial Architecture for the Twenty-First Century,” Cato Journal, Winter, 18, 1999.

[19] Taguchi, Hiroyuki, “Exchange Rate Management and Capital Inflows in Selected East Asian Countries,” Journal of International Development Studies, Vol.12, No.1, 2003.

[20] Taguchi, Hiroyuki, “Exchange Rate Management and Trade Balance in Selected East Asian Countries,” Studies on Regional Science, Vol.33, No.1, 2003.

[21] Williamson, John, Exchange Rate Regimes for Emerging Markets: Reviving the Intermediate Option, Institute for International Economics, Washington, D.C., 2000.