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

Publication Date

23/02/2004

JEL Code(s)

  • C25, F33, F41

Keyword(s)

  • exchange rate regimes, developing countries, Multinomial logit model, Static and dynamic panel, Simulation

Programme Area(s)

  • International Macroeconomics

Abstract

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.