The Evolution of Exchange Rate Regimes Since 1990 Evidence from De Facto Policies

By Andrea Bubula, Inci Otker-Robe. Social Science Research Network, 2002

296 citations recorded by the source corpus.

This paper presents a monthly database on de facto exchange rate regimes that covers all IMF members since 1990. Information from IMF country reports and other sources, including exchange rate data, is utilized to determine de facto exchange rate policies. Countries are categorized based on these policies using the IMF nomenclature adopted in 1999. This approach ensures the forward compatibility of the database. The database is then used to examine whether the bipolar view of exchange regimes holds with de facto regimes. It is found that the proportion of countries adopting intermediate regimes has indeed been shrinking in favor of greater flexibility or greater fixity, especially for countries more integrated with international markets. Analyses based on Markov chains of regime transitions, however, provide (mixed) evidence against the bipolar view.

Subfields: Development, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/06d31f34452aa9c12f0e2dddf4f46d0598332bea

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Citations in the corpus

• The influence of the international oil prices on the real effective exchange rate in Romania in a wavelet transform framework (2013, unknown): “5 Bubula and Ötker-Robe (2002) underline that therewas some difference between the official exchange rate regimes and “de facto” ones in the transition countries in the 1990s.”
• Evolution and Performance of Exchange Rate Regimes (2003, unknown): “Using historical data and information on countries' exchange arrangements, Bubula and Ötker-Robe (2002) put together a database containing IMF de facto classifications going back to 1990.”
• Exchange rate regime durability and performance in developing versus advanced economies (2005, unknown): “15 Bubula and Ötker-Robe (2003) continue to find vulnerability in the intermediate regimes in the 1990s but they do not distinguish emerging markets.”
• Exchange Rate Management and Crisis Susceptibility: A Reassessment (2014, unknown): “Consistent with earlier findings by Masson (2000) and Bubula and Ötker-Robe (2002), formal tests reject the bipolar view as a positive prediction (Table 1, last row).”
• Central Bank Independence and Transparency: Evolution and Effectiveness (2008, unknown): “Bubula, A. and I. Ötker-Robe, 2002, “The Evolution of Exchange Rate Regimes Since 1990: Evidence from De Facto Policies,” IMF Working Paper 02/155 (Washington: International Monetary Fund).”
• Any Link between Legal Central Bank Independence and Inflation?: Evidence from Latin America and the Caribbean (2005, background): “More importantly, Campillo and Miron (1997) showed that the negative relationship between CBI and inflation obtained in Cukierman et al.”
• The Empirics of Foreign Exchange Intervention in Emerging Market Countries: The Cases of Mexico and Turkey (2004, unknown): “In many countries, intervention remains important even after moving to managed and independently floating exchange rates from various forms of pegs (Bubula and Otker-Robe, 2002, and Reinhart and Rogoff, 2003).”
• On Target? the International Experience with Achieving Inflation Targets (2005, result): “The absence of exits from inflation targeting stands in contrast to the record of conventional fixed exchange rate peg regimes and monetary targeting (Bubula and Otker-Robe, 2002; Stone and Bhundia, 2004).”
• The Classification and Performance of Alternative Exchange-Rate Systems (2008, methodology): “In studies by the IMF (1999; 2003) and Bubula and Ötker-Robe (2002), 190 self-described (by the national authorities) regimes, covering the (monthly) period 1990-2001, were amended by IMF economists based on their assessments of movements in reserves and official exchange rates or, in cases where…”