Fixed versus Flexible Exchange Rates: Evidence from Developing Countries

This paper empirically investigates Mundell's (1961) formalisation that in a small open economy flexible exchange rates act as a `shock absorber'. The role of a world real interest rate shock in driving output, trade imbalances and real exchange rate fluctuations under different exchange rate regimes is empirically investigated in a Panel VAR, which utilises economic theory for identification.

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Year of publication:	2003-06-04
Authors:	Hoffmann, Mathias
Institutions:	Royal Economic Society - RES
Subject:	small open economies \| exchange rate regimes \| panel VAR

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Series:	Royal Economic Society Annual Conference 2003.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Royal Economic Society Annual Conference, 2003 Number 109
Classification:	C33 - Models with Panel Data ; F31 - Foreign Exchange ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005577157