Exchange Rate Regimes, Inflation and Growth in Developing Countries -- An Assessment

Abstract

Official and four alternative regime classification schemes based on observed exchange rate behaviour are used to examine the relationship with inflation and growth in 91 developing countries over the period [1984][1985][1986][1987][1988][1989][1990][1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001]. Apart from one scheme that produces markedly unfavourable results for floating (for reasons that are discussed in the paper), the consistent findings are that (a) floats have similar growth rates to soft pegs and only slightly higher inflation; and (b) hard pegs have lower inflation and slower growth than other regimes.

The impact of macro news and central bank communication on emerging European forex markets

“…1 What is the empirical evidence for the CEE region? Exchange rates are known to be volatile in emerging markets (Bleaney and Francisco, 2007), including those in the CEE region (Kočenda and Valachy, 2006). However, they are much less explored than those of the developed markets and one of the main reasons for this is the lack of data (Cavusoglu, 2010).…”

Exchange-Rate Regime and Economic Growth: A Review of the Theoretical and Empirical Literature

“…The latter could be due to a measurement error in the exchange-rate regimes' classifications (Levy-Yeyati and Sturzenegger, 2002), divergences in measuring exchange-rate uncertainty (Du and Zhu, 2001) or sampling bias (Huang and Malhorta, 2004). A great part of the studies focuses on the parameter of the exchange-rate dummy, but do not appropriately control for other country characteristics nor apply appropriate growth framework (Bleaney and Francisco, 2007). Also, the issue of endogeneity is not treated at all or inappropriate instruments are repeatedly used (Huang and Malhorta, 2004;Bleaney and Francisco, 2007).…”

“…A great part of the studies focuses on the parameter of the exchange-rate dummy, but do not appropriately control for other country characteristics nor apply appropriate growth framework (Bleaney and Francisco, 2007). Also, the issue of endogeneity is not treated at all or inappropriate instruments are repeatedly used (Huang and Malhorta, 2004;Bleaney and Francisco, 2007). Very few studies pay attention to the capital controls, an issue closely related to the exchange-rate regime and only one study puts the issue in the context of monetary regimes.…”

Assessment of Exchange Rate Policy in Selected Central and Eastern European Countries in Terms of Optimising the Strategy of Euro Adoption

“…Z kolei stały kurs walutowy może skutecznie wspomagać politykę ukierunkowaną na obniżanie inflacji (por. Romer, 1993, s. 869-903;Ghosh i in., 1996;Bleaney, Francisco, 2005, s. 1453-1471Bleaney, Francisco, 2007).…”