Classifying Exchange Rate Regimes: 15 Years Later
32 Pages Posted: 12 Aug 2016 Last revised: 13 Aug 2016
Date Written: June 29, 2016
Levy Yeyati and Sturzenegger (2001, 2003, 2005) proposed an exchange rate regime classification based on cluster analysis to group countries according to the relative volatility of exchange rates and reserves, thereby shifting the focus from a de jure to de facto approach in the empirical analysis of exchange rate policy. This note extends the classification through 2014 and broadens the country sample, increasing the number of classified country-year observations from 3335 to 5616. Based on this extension, the note documents the main stylized facts in the 2000s, including the behavior of exchange rate policy around the global financial crisis, and the prevalence of floating regimes.
Keywords: Exchange Rate Regimes, Fear of Floating, Fear of Appreciation
JEL Classification: F30, F33
Suggested Citation: Suggested Citation