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Bi-Polar Disorder: Exchange Rate Regimes, Economic Crises and the IMF

Author

Listed:
  • Graham Bird

    (University of Surrey)

  • Dane Rowlands

    (Carleton University)

Abstract

Over the course of the 1990s economists appeared to favour exchange rate regimes that were either completely flexible or rigidly fixed through mechanisms such as currency boards. According to this "bipolar" view of exchange rates, intermediate regimes were deemed to be ineffective and prone to crisis. This paper examines the link between exchange rate regimes and International Monetary Fund (IMF) programme use and finds fairly strong evidence that countries with intermediate exchange rate regimes are less likely to go to the IMF than others. To the extent that International Monetary Fund (IMF) programmes are a proxy for balance of payments difficulties, this finding supports the more recent, nuanced, literature on exchange rate regime choice.

Suggested Citation

  • Graham Bird & Dane Rowlands, 2005. "Bi-Polar Disorder: Exchange Rate Regimes, Economic Crises and the IMF," School of Economics Discussion Papers 0705, School of Economics, University of Surrey.
    • Handle: RePEc:sur:surrec:0705
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    File URL: https://repec.som.surrey.ac.uk/2005/DP07-05.pdf
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    References listed on IDEAS

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    1. Vreeland,James Raymond, 2003. "The IMF and Economic Development," Cambridge Books, Cambridge University Press, number 9780521016957, January.
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    5. Graham Bird & Dane Rowlands, 2001. "IMF lending: how is it affected by economic, political and institutional factors?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(3), pages 243-270.
    6. Jeffrey A. Frankel, 1999. "No Single Currency Regime is Right for All Countries or At All Times," NBER Working Papers 7338, National Bureau of Economic Research, Inc.
    7. Knight, Malcolm & Santaella, Julio A., 1997. "Economic determinants of IMF financial arrangements," Journal of Development Economics, Elsevier, vol. 54(2), pages 405-436, December.
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    11. repec:rus:hseeco:181565 is not listed on IDEAS
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    Cited by:

    1. Alexis Cruz-Rodriguez, 2013. "Choosing and Assessing Exchange Rate Regimes: a Survey of the Literature," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 28(2), pages 37-61, October.

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    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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