TY - JOUR
T1 - Dynamic Analysis of the Exchange Rate Regime
T2 - Policy Implications for Emerging Countries in East Asia
AU - Yoshino, Naoyuki
AU - Kaji, Sahoko
AU - Asonuma, Tamon
N1 - Publisher Copyright:
© 2015 John Wiley & Sons Ltd.
PY - 2015
Y1 - 2015
N2 - This paper discusses exchange rate policies in East Asia. In particular, we explore whether actual policies that have been implemented by East Asian countries after the Asian Financial Crisis follow or deviate from theoretically "desirable" policies over the medium and long terms. On theoretical analysis, we show the relative superiority of a basket-peg regime with the basket weight rule when compared with a floating regime implementing the interest rate rule or money supply rule. For countries that currently adopt a fixed exchange rate regime, they would be better off shifting toward either a basket-peg or a floating regime over the medium term. A shift to a basket peg is more preferred when compared with a shift to a floating regime when the exchange rate fluctuations are large.
AB - This paper discusses exchange rate policies in East Asia. In particular, we explore whether actual policies that have been implemented by East Asian countries after the Asian Financial Crisis follow or deviate from theoretically "desirable" policies over the medium and long terms. On theoretical analysis, we show the relative superiority of a basket-peg regime with the basket weight rule when compared with a floating regime implementing the interest rate rule or money supply rule. For countries that currently adopt a fixed exchange rate regime, they would be better off shifting toward either a basket-peg or a floating regime over the medium term. A shift to a basket peg is more preferred when compared with a shift to a floating regime when the exchange rate fluctuations are large.
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U2 - 10.1111/rode.12163
DO - 10.1111/rode.12163
M3 - Article
AN - SCOPUS:84943595856
VL - 19
SP - 624
EP - 637
JO - Review of Development Economics
JF - Review of Development Economics
SN - 1363-6669
IS - 3
ER -