The Endogeneity of Exchange Rate RegimesThe international monetary system has passed through a succession of phases characterized alternatively by the dominance of fixed and flexible exchange rates. How are these repeated shifts between fixed and flexible rate regimes to be understood? The present paper specifies and tests six hypotheses with the capacity to explain the alternating phases of fixed and flexible exchange rates into which the last century can be partitioned. The evidence provides support for a number of the hypotheses considered. In this sense it confirms that monocausal explanations are unlikely to provide an adequate account of the endogeneity of exchange rate regimes. |
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Angus Deaton Author Title Date Bank of England Bank of France Barry Eichengreen Bordo Bretton Woods System British Bryan's share central banks choice of exchange classical gold standard collapse consensus Correlation of GDP crisis currency deflation demand shocks depreciation devaluation discount rate disturbances domestic dominant employment endogeneity of exchange evidence exchange rate policy exchange rate regime exchange rate stability fixed and flexible fixed exchange rates fixed rate regimes fixed-rate system flexible exchange rates flexible rates floating rates Fratianni French government spending hegemonic hypotheses considered hypothesis inflation interest rates international cooperation international economic international monetary stability international monetary system interwar gold standard leadership Linear Filter macroeconomic maintenance of fixed Martin Feldstein measure monetary policy mortgage debt NBER Number Author Title output volatility pegged policy response policymakers Political post-Bretton Woods float provides regime maintenance seigniorage shifts between fixed signs and differ silver slump Standard Deviation trade urban