The macroeconomic implication of exchange rate regimes

Josheski, Dushko and Ljubica, Cikarska and Cane, Koteski (2011): The macroeconomic implication of exchange rate regimes.

Abstract

This study investigates the relation between macroeconomic variables such as real GDP growth, inflation, unemployment rate, trade deficit and the exchange regimes. The idea is to explore whether the macroeconomic indicators give better result when are under the influence of fixed or fluctuating exchange rates. In order to obtain relevant results, we took 5 countries with fixed and 5 countries with floating exchange rates. The paper also concerns the Macedonian exchange rate regimes. Here the focus is put on two periods. The first one is from 1993- 1995 when the country had fluctuating exchange rate. The second period is from 1995 till now -2011, when Macedonia has been implementing a regime of fixed "pegged" exchange rate.

• Item Type: MPRA Paper
• Language: English
• Keywords: exchange rate, macroeconomic variables
• Subjects: F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General; C - Mathematical and Quantitative Methods > C0 - General > C00 - General; F - International Economics > F3 - International Finance > F31 - Foreign Exchange

References

Statistical Data are provided from:

eurostat.ec.europa.eu

Penn World Table

International Monetary Fund

worldbank.org

Levy Yeyati, E and Sturzenegger, F (2001) Exchange Rate Regimes and Economic Performance, Forthcoming American Economic Review.

NBRM (1993-2010) Annual Statement (1993-2010). National Bank of Macedonia.

NBRM (2011) Half- Annual Statement (2011). National Bank of Macedonia.

Mundell, R. and Friedman, M (2001) Debate the virtues- or not- of fixed exchange rates, gold and world currency, Published in Options Politiques.