2013 Fiscal Year Final Research Report

Exchange rate regime choice and economic performances: An empirical study using microeconometric methods

Research Project

Project/Area Number	23730302
Research Category	Grant-in-Aid for Young Scientists (B)
Allocation Type	Multi-year Fund
Research Field	Public finance/Monetary economics
Research Institution	Kobe City University of Foreign Studies
Principal Investigator	ESAKA Taro 神戸市外国語大学, 外国語学部, 准教授 (60347515)
Project Period (FY)	2011 – 2013
Keywords	国際金融 / 為替制度 / 経済パフォーマンス / 通貨危機 / 投機攻撃 / 内生性
Research Abstract	This study evaluates the effects of exchange rate regimes on economic performances using microeconometric methods. Especially, I investigate whether deviations of actual exchange rate regimes from announced regimes affect the occurrence of currency crises using matching methods. I find that countries with consistent pegs (i.e., a policy in which countries actually adopt announced pegged regimes) have a significantly lower probability of currency crises than countries with other exchange rate policies. More interestingly, I find that countries with consistent pegs have a significantly lower probability of currency crises than those with a fear of announcing a peg policy (i.e., a policy in which countries actually adopt pegged regimes but do not claim to have pegged regimes). Therefore, I statistically confirm that deviations of actual exchange rate regimes from announced regimes significantly affect the occurrence of currency crises.