Does the Nominal Exchange Rate Regime Matter? / Atish R. Ghosh, Anne-Marie Gulde, Jonathan D. Ostry, Holger C. Wolf.

Format:

Book

Author/Creator:

Ghosh, Atish R.

Contributor:

Gulde, Anne-Marie.

Ostry, Jonathan D. (Jonathan David), 1962-

Wolf, Holger C.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5874.

NBER working paper series no. w5874

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1997.

Summary:

The relevance of the exchange rate regime for macroeconomic performance remains a key issue in international macroeconomics. We use a comprehensive dataset covering nine regime-types for one hundred forty countries over thirty years to examine the link between the regime, inflation, and growth. Two sturdy stylized facts emerge. First, inflation is both lower and more stable under pegged regimes, reflecting both slower money supply and faster money demand growth. Second, real volatility is higher under pegged regimes. In contrast, growth varies only slightly across regimes, though investment is somewhat higher and trade growth somewhat lower under pegged regimes. Pegged regimes are thus characterized by lower inflation but more pronounced output volatility.

Notes:

Print version record

January 1997.