Exchange Rate Regime Transitions

18 Pages Posted: 31 Jan 2006

See all articles by Paul R. Masson

Paul R. Masson

International Monetary Fund (IMF) - Research Department; The Brookings Institution

Date Written: July 2000

Abstract

The hollowing-out, or two poles hypothesis is tested in the context of a Markov chain model of exchange rate transitions. In particular, two versions of the hypothesis - that hard pegs are an absorbing state, or that fixes and floats form a closed set, with no transitions to intermediate regimes - are tested using two alternative classifications of regimes. While there is some support for the lack of exits from hard pegs (i.e., that they are an absorbing state), the data generally indicate that the intermediate cases will continue to constitute a sizable proportion of actual exchange rate regimes.

Keywords: exchange rates, regimes, pegs, floating

JEL Classification: F33

Suggested Citation

Masson, Paul R., Exchange Rate Regime Transitions (July 2000). IMF Working Paper No. 00/134, Available at SSRN: https://ssrn.com/abstract=879913

Paul R. Masson (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

The Brookings Institution ( email )

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States
202-797-6278 (Phone)
202-797-2968 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
93
Abstract Views
574
rank
344,195
PlumX Metrics