Globalization and Government Short-Term Room to Maneuver in Economic Policy. An Empirical Analysis of Reactions to Currency Crises

World Political Science Review 5(1), article 16, 2009

Posted: 27 Jan 2015

See all articles by Thomas Sattler

Thomas Sattler

ETH Zürich

Stefanie Walter

University of Zurich - Institute for Political Science

Date Written: 2009

Abstract

This article assesses the popular view that currency crises represent a prime example of the constraints that globalization imposes on government room to maneuver. We show that governments in fact have the possibility to respond to speculative pressure in different ways. Whether or not policymakers succumb to this pressure is not solely determined by economic factors but also a question of political considerations. Political preferences, institutions, and events significantly affect policy responses to currency crises. Our results suggest that national governments retain substantial short-run policy autonomy even in highly internationalized policy areas such as monetary and exchange rate policy.

Keywords: globalization, policy autonomy, currency crises, exchange rate politics

Suggested Citation

Sattler, Thomas and Walter, Stefanie, Globalization and Government Short-Term Room to Maneuver in Economic Policy. An Empirical Analysis of Reactions to Currency Crises (2009). World Political Science Review 5(1), article 16, 2009. Available at SSRN: https://ssrn.com/abstract=2497401

Thomas Sattler

ETH Zürich ( email )

Zürichbergstrasse 18
8092 Zurich, CH-1015
Switzerland

Stefanie Walter (Contact Author)

University of Zurich - Institute for Political Science ( email )

Dep. of International Relations
Seilergraben 49
CH-8001 Zurich
Switzerland

Register to save articles to
your library

Register

Paper statistics

Abstract Views
139
PlumX Metrics