Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/115318
Authors: 
Yoshino, Naoyuki
Kaji, Sahoko
Asonuma, Tamon
Year of Publication: 
2014
Series/Report no.: 
ADBI Working Paper Series 502
Abstract: 
This paper discusses desirable exchange rate regimes and how countries can shift from their current regimes to these regimes over the medium term. We demonstrate the superiority of a basket-peg regime with the basket weight rule over a floating regime with the interest rate rule or the money supply rule in small open economies, during periods when volatility of exchange rates is moderate. Countries which currently have fixed exchange rates would be better moving toward either a basket-peg or a floating regime over the medium term. A shift to a basket-peg regime is preferred when exchange rate fluctuations are large.
Subjects: 
exchange rate regimes
basket-peg
floating regime
interest rate rules
JEL: 
E42
F33
F41
F42
Document Type: 
Working Paper

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