This paper investigates the consequences of elections on the capacity of governments to defend a fixed parity in the presence of output shocks. It demonstrates that the political uncertainty associated with elections may significantly modify the reactions of governments in a way that may be...

In this paper we investigate the consequences of elections on the willingness of office-motivated governments to defend a pre-announced parity in the presence of output shocks in a fixed exchange rate regime with an escape clause. Knowing that voters rationally interpret realignments as a sign...

Recent literature suggests that a proactive exchange rate policy in accordance with price incentives (i.e. undervaluation) can foster manufactured exports and growth. This paper is built on these recent developments and investigates, using a sample of 52 developing countries, whether such a...