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To float or not to float? exchange rate regimes and shocks

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Abstract

Recent research has reconsidered the stabilization properties of a flexible exchange rate regime when exchange rate movements affect financial conditions, and these, in turn, influence economic activity. This Economic Letter summarizes some of the findings of these studies and their policy prescriptions for the choice of the exchange rate regime.

Suggested Citation

  • Michele Cavallo, 2005. "To float or not to float? exchange rate regimes and shocks," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue jan7.
    • Handle: RePEc:fip:fedfel:y:2005:i:jan7:n:2005-01
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    References listed on IDEAS

    as
    1. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 379-408.
    2. Michele Cavallo & Kate Kisselev & Fabrizio Perri & Nouriel Roubini, 2004. "Exchange rate overshooting and the costs of floating," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.
    3. Luis Felipe Céspedes & Roberto Chang & Andrés Velasco, 2004. "Balance Sheets and Exchange Rate Policy," American Economic Review, American Economic Association, vol. 94(4), pages 1183-1193, September.
    4. repec:rus:hseeco:124089 is not listed on IDEAS
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    Cited by:

    1. Petreski, Marjan, 2009. "Exchange-rate regime and economic growth: a review of the theoretical and empirical literature," Economics Discussion Papers 2009-31, Kiel Institute for the World Economy (IfW Kiel).
    2. Petreski, Marjan, 2009. "Analysis of exchange-rate regime effect on growth: theoretical channels and empirical evidence with panel data," Economics Discussion Papers 2009-49, Kiel Institute for the World Economy (IfW Kiel).

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    Foreign exchange rates;

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