Real exchange rate variability and the choice of exchange rate regime by developing countries
Journal
Journal of International Money and Finance
Date Issued
1990
Author(s)
DOI
10.1016/0261-5606(90)90021-Q
Abstract
This paper draws together two distinct strands of the exchange rate literature. It proposes that real exchange rate variability and the choice of exchange rate regime are jointly determined. I test this claim by estimating a simultaneous limited-dependent variable model, with data from a cross section of developing countries during the recent floating period. Drawing on the relevant exchange rate literature, the paper examines a number of exogenous determinants of exchange rate variability and the choice of exchange rate regime.