The Reverse Relationship between the Choice of Exchange Rate Regime and the Macro-Variables

8 Pages Posted: 19 Jun 2006

See all articles by Marjan Petreski

Marjan Petreski

University of American college - Skopje - School of Business Economics and Management

Date Written: June 2006

Abstract

The exchange rate regime is an issue which continuously captures academic interests. Since the exchange rate regime affects all macroeconomic variables in every national economy, the choice - whether fixed or flexible, is quite a sensitive and significant decision. Both, fixed and flexible exchange rate regime, have their advantages and disadvantages. The latter are closely related with a certain level at which the monetary and real variables appear under the one or the other regime. Even though a consensus was reached regarding the positive impact of the fixed regime on the monetary discipline (i.e., low inflation), contradictory arguments still exist for its influence on the economic growth.

Keywords: Exchange rate regime, Fixed regime, Flexible regime, Inflation, Economic growth

JEL Classification: F31

Suggested Citation

Petreski, Marjan, The Reverse Relationship between the Choice of Exchange Rate Regime and the Macro-Variables (June 2006). Available at SSRN: https://ssrn.com/abstract=909617 or http://dx.doi.org/10.2139/ssrn.909617

Marjan Petreski (Contact Author)

University of American college - Skopje - School of Business Economics and Management ( email )

Skopje, 1000
Macedonia

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