Exchange Rates and Insulation in Emerging Markets
- Authors
- Eichengreen, Barry; Park, Donghyun; Ramayandi, Arief; Shin, Kwanho
- Issue Date
- 7월-2020
- Publisher
- SPRINGER
- Keywords
- Exchange rate; Exchange rate regime; Fixed; Flexible; Intermediate; Shock; Insulate
- Citation
- OPEN ECONOMIES REVIEW, v.31, no.3, pp.565 - 618
- Indexed
- SSCI
SCOPUS
- Journal Title
- OPEN ECONOMIES REVIEW
- Volume
- 31
- Number
- 3
- Start Page
- 565
- End Page
- 618
- URI
- https://scholar.korea.ac.kr/handle/2021.sw.korea/54927
- DOI
- 10.1007/s11079-020-09587-2
- ISSN
- 0923-7992
- Abstract
- The insulating properties of flexible exchange rates have long been a highly contentious issue in emerging markets-not least in Asian emerging markets. A number of recent theoretical and empirical studies question whether a trade-off exists between rigid exchange rate regimes and insulation from foreign shocks when the degree of international capital mobility is high. On the other hand, Obstfeld et al. (2017) find that countries with flexible exchange rate regimes experience less real and financial instability in the face of global financial volatility. We contribute to this empirical debate by significantly extending their analysis. Overall, our findings are broadly consistent with their results, suggesting that flexible exchange rate regimes are better at insulating emerging markets from external shocks. There are, however, a few subtle differences. In particular, we find somewhat less robust evidence that limited flexibility is enough to insulate emerging markets from shocks.
- Files in This Item
- There are no files associated with this item.
- Appears in
Collections - College of Political Science & Economics > Department of Economics > 1. Journal Articles
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.