High Interest Rates and Exchange Rate Stabilization in Korea, Malaysia, and Thailand: An Empirical Investigation of the Traditional and Revisionist Views

15 Pages Posted: 31 Dec 2002

See all articles by Robert Dekle

Robert Dekle

University of Southern California - Department of Economics

Cheng Hsiao

University of Southern California - Department of Economics; National Taiwan University; National Bureau of Economic Research (NBER)

Siyan Wang

University of Delaware - Economics

Abstract

The paper seeks to determine whether high interest rates have had the effect of appreciating nominal exchange rates in three Asian countries. The authors use high-frequency data for Korea, Malaysia, and Thailand during the recent crisis and its aftermath to examine the relationship between the increase in interest rates and the behavior of exchange rates. It is found that raising interest rates has had a small impact on nominal exchange rates during the crisis period.

Suggested Citation

Dekle, Robert and Hsiao, Cheng and Wang, Siyan, High Interest Rates and Exchange Rate Stabilization in Korea, Malaysia, and Thailand: An Empirical Investigation of the Traditional and Revisionist Views. Review of International Economics, Vol. 10, pp. 64-78, 2002. Available at SSRN: https://ssrn.com/abstract=309453

Robert Dekle (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States
213-740-8335 (Phone)

Cheng Hsiao

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

National Taiwan University

1 Sec. 4, Roosevelt Road
Taipei, 106
Taiwan

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Siyan Wang

University of Delaware - Economics ( email )

Newark, DE 19716
United States
302-831-1924 (Phone)
302-831-6968 (Fax)

HOME PAGE: http://www.be.udel.edu/economics/New%20Fac%20Minivita/wang.htm

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