The Evidence and Impact of Financial Globalization

Chapter 30

Exchange Rate Regimes

E. Levy Yeyati

UTDT and Brookings Institution, Buenos Aires, Argentina

Outline

Introduction

Exchange Rate Regimes

Taxonomy and Classification

Trends

Why do we Care about ERR?

ERR and Growth

ERR and Inflation: Anchors

Other Links: Trade, Finance

Exchange Rate Policies in the Post-Bretton Woods Era

Exchange Rate Anchors in the 1980s

Financial Integration and Financial Crises in the 1990s

Float cum Inflation Targeting

Leaning-Against-the-Wind Exchange Rate Intervention

The prudential motive

The mercantilist motive

Taking Stock

References

Introduction

The choice of the exchange rate regime (ERR) has direct implications on the evolution of key nominal variables of the economy (inflation, relative prices) and, as a result, ...