Does the Nominal Exchange Rate Regime Matter?

35 Pages Posted: 17 Aug 2000 Last revised: 4 Oct 2010

See all articles by Atish R. Ghosh

Atish R. Ghosh

International Monetary Fund (IMF) - Policy Development and Review Department

Anne-Marie Gulde

International Monetary Fund (IMF)

Jonathan D. Ostry

International Monetary Fund (IMF)

Holger C. Wolf

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS)

Multiple version iconThere are 2 versions of this paper

Date Written: January 1997

Abstract

The relevance of the exchange rate regime for macroeconomic performance remains a key issue in international macroeconomics. We use a comprehensive dataset covering nine regime-types for one hundred forty countries over thirty years to examine the link between the regime, inflation, and growth. Two sturdy stylized facts emerge. First, inflation is both lower and more stable under pegged regimes, reflecting both slower money supply and faster money demand growth. Second, real volatility is higher under pegged regimes. In contrast, growth varies only slightly across regimes, though investment is somewhat higher and trade growth somewhat lower under pegged regimes. Pegged regimes are thus characterized by lower inflation but more pronounced output volatility.

Suggested Citation

Ghosh, Atish R. and Gulde, Anne-Marie and Ostry, Jonathan D. and Wolf, Holger C., Does the Nominal Exchange Rate Regime Matter? (January 1997). NBER Working Paper No. w5874. Available at SSRN: https://ssrn.com/abstract=225658

Atish R. Ghosh (Contact Author)

International Monetary Fund (IMF) - Policy Development and Review Department ( email )

700 19th St. NW
Washington, DC 20431
United States

Anne-Marie Gulde

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Jonathan D. Ostry

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Holger C. Wolf

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

Washington, DC 20057
United States
202-687-8079 (Phone)
202-687-8359 (Fax)

HOME PAGE: http://georgetown.edu/faculty/wolfhc/

Register to save articles to
your library

Register

Paper statistics

Downloads
151
Abstract Views
2,574
rank
90,882
PlumX Metrics