The political economy of exchange rate regimes in transition economies

Frieden, Jeffry; Leblang, David; Valev, Neven T.

doi:10.1007/s11558-009-9072-7

Cited by 36 publications

(9 citation statements)

References 28 publications

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“…Also, according to the optimum currency area theory (Mundell, 1961;McKinnon, 1963), countries that engage in high volumes of international trade prefer fixed regimes since it is more suitable for trade. This finding is consistent with previous literature such as Frieden et al (2000), Piragic and Jameson (2005), Markiewicz (2006), Frieden et al (2010), and Rodriguez (2016). On the other hand, inflation has a positive and statistically significant impact on the probability of adopting more flexible regimes in all the estimations.…”

Section: Resultssupporting

confidence: 92%

The empirical relationship between financial development and foreign exchange regimes: Did global financial crisis of 2007-2009 change regime preferences?

Güngör¹,

Balcılar²,

Olasehinde‐Williams³

2019

EJSD

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This paper studies the empirical nexus between financial development and foreign exchange regime choices of two sets of countries as developed and developing economies. Data covers for the period of 2000-2016 and we employed ordered logistic regression models and found out that more developed financial systems contributes to greater flexibility in exchange rate regimes. We also found that domestic macroeconomic environment and the level of global economic integration play a role in the choice of exchange rate regime. Furthermore, developing countries favour more restrictive regimes while developed countries favour more flexible regimes. Global financial crisis of 2007-2009 has altered the level of influence exerted on the choice of regimes by the so called determinants of regime choice. We specifically discovered that the explanatory powers of the domestic and international macroeconomic environments on regime choice have waned post crises, suggesting that countries have chosen keep tighter control on exchange rates.

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Section: Resultssupporting

confidence: 92%

The empirical relationship between financial development and foreign exchange regimes: Did global financial crisis of 2007-2009 change regime preferences?

Güngör¹,

Balcılar²,

Olasehinde‐Williams³

2019

EJSD

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“…Russia, in contrast, employed a managed float throughout most of the period under scrutiny. Ukraine has tried several exchange rate regimes, including fixed peg and independent float [for a survey of exchange rate regimes in transition economies, see Agnieszka Markiewicz (2006), Jeffry Frieden, David Leblang, and Neven Valev (2010)].…”

Section: Macroeconomic Backgrounds Of Six Post-communist Countriesmentioning

confidence: 99%

Are the twin or triple deficits hypotheses applicable to post-communist countries?

Şen

Kaya

2020

Panoeconomicus

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This study examines the validity of the twin or triple deficits hypotheses using bootstrap panel Granger causality analysis and an annual panel dataset of six postcommunist countries (Russia, Poland, Ukraine, Romania, the Czech Republic, and Hungary) during the period from 1994 to 2015. The results corroborate neither the validity of the twin deficits hypothesis nor its extended version, the triple deficits hypothesis, for any of the sample countries. In other words, we find no Granger causal relationship between budget deficits and external (trade or current account) deficits or among budget deficits, private savings-investment deficits, and external deficits in the countries examined. On the basis of these results, we reject the Keynesian view of the twin or triple deficits hypotheses. Rather, we confirm the Ricardian view.

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“…We build upon a large literature on the choice between different exchange rate regimes including Edwards (), Poirson (), Calvo and Reinhart () and Von Hagen and Zhou (), and on the choice of exchange rate regimes in the transition countries including Klyuev (), Von Hagen and Zhou (), Markiewicz () and Frieden et al . (). Unlike the previous literature that investigates the actual choice of exchange rate regimes, the survey data allow us to investigate why a policy change did not occur .…”

Section: Introductionmentioning

confidence: 97%

Fear of floating

Valev

2016

Econ Transit

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This paper uses unique household survey data to investigate the expected effects of a switch from a fixed exchange rate regime to a floating exchange rate regime in Bulgaria during the global financial crisis. The data show that the public associated such a switch with a contraction of output, higher prices, a decline in exports, and an overall deterioration of economic welfare. These expectations fuelled a strong opposition to removing the fixed exchange rate. Thus, the survey data allow us to investigate why a switch from a fixed exchange rate to a floating exchange rate did not take place.

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The political economy of exchange rate regimes in transition economies

Cited by 36 publications

References 28 publications

The empirical relationship between financial development and foreign exchange regimes: Did global financial crisis of 2007-2009 change regime preferences?

The empirical relationship between financial development and foreign exchange regimes: Did global financial crisis of 2007-2009 change regime preferences?

Are the twin or triple deficits hypotheses applicable to post-communist countries?

Fear of floating

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