Bizuneh, Menna; Valev, Neven - In: Review of International Economics 22 (2014) 4, pp. 686-699
Theory predicts that a fixed exchange rate regime will be abandoned after a sizable economic shock as currency devaluation could stimulate exports and output. However, devaluation is risky as the new level of the exchange rate and the rate of inflation cannot be predicted. We show that this...
