DP4227 The Choice of Exchange Rate Regime in Developing Countries: A Multinational Panel Analysis

Author(s): J├╝rgen von Hagen, Jizhong Zhou
Publication Date: February 2004
Keyword(s): developing countries, exchange rate regimes, multinomial logit model, simulation, static and dynamic panel
JEL(s): C25, F33, F41
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4227

This Paper analyses the choices of exchange rate regimes in developing countries since 1980. Static and dynamic random-effects multinomial panel models are estimated using simulation-based techniques. Explanatory variables include OCA fundamentals, stabilization considerations, currency crises factors, and political and institutional features. The results reveal strong state dependence in regime choices.