EconStor >
United Nations University (UNU) >
World Institute for Development Economics Research (UNU-WIDER), United Nations University >
WIDER Discussion Papers, United Nations University (UNU) >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/52951
  
Title:How optimal are the extremes? Latin American exchange rate policies during the Asian crisis PDF Logo
Authors:Ffrench-Davis, Ricardo
Larraín, Guillermo
Issue Date:2002
Series/Report no.:WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2002/18
Abstract:During the Asian crisis, intermediate exchange rate regimes vanished. It has been argued that those regimes were no longer useful and only the extremes remained valid. The paper analyses three foreign exchange regimes: Argentina (pegged), Chile (band) and Mexico (float). The Argentinean currency board delivered low financial volatility while it was credible, but even then it displayed high real volatility. Mexican float performed well in periods of instability isolating the real sector. The Chilean band delivered a mixed outcome as compared to Argentina and Mexico. This is linked apparently to a loss in the band’s credibility, associated to policy mismanagement and an over-appreciation in the biennium before the crisis. Optimal exchange rate regimes vary across time and the conjuncture. Exit strategies are part of the election of the optimal system, including a flexible policy package rather than a single rigid policy tool.
Subjects:exchange rate
crawling-bands
currency boards
macroeconomic sustainability
Latin America
JEL:E61
E65
F31
F41
ISBN:9291901555
Document Type:Working Paper
Appears in Collections:WIDER Discussion Papers, United Nations University (UNU)

Files in This Item:
File Description SizeFormat
345967305.pdf160.22 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/52951

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.