This working paper was written by Yin-wong Cheung (University of California, Santa Cruz) and Kon S. Lai (California State University, Los Angeles).This study investigates whether greater nominal exchange rate flexibility aids real exchange rate adjustment based on data from dual exchange rates...

Milton Friedman was a strong proponent of flexible exchange rates accompanied by a domestic monetary rule. He believed that such a combination would deliver superior economic performance and would also be more consistent with democratic principles than a regime based on fixed exchange rates and...

We investigate whether the impacts of the main push (global financial conditions, GFC) and pull (growth) factors on capital inflows are invariant to endogenously estimated thresholds for exchange rate regimes (ERRs) in emerging economies. The impact of GFC is higher under more flexible ERRs for...

AbstractsWe examine how bilateral currency swap arrangements (BSAs) conducted by the People’s Bank of China affects bilateral exchange rate volatility from 2009 to 2019. Applying an intervention analysis based on model-selection approach, we find 21 (16) significant (negative) effects out of...