DP1240 | After the Deluge: Do Fixed Exchange Rates Allow Inter-temporal Volatility Trade-offs?


Publication Date


JEL Code(s)


Programme Area(s)


This paper addresses the issue of whether regimes of fixed exchange rates are a mechanism for shifting volatility inter-temporally. Using a panel of data covering 20 industrialized countries from 1959 through 1993, I examine the volatilities of a host of real and monetary variables. Graphical and statistical examination of the periods around 33 flotations and 81 devaluations reveals little evidence of significant increases in volatility following these events.