Does exchange rate regime explain differences in economic results for Asian countries?

摘要

The paper aims at determining whether exchange rate regimes have an impact on inflation and growth for a sample often major Asian countries for the period 1990:01-2001.'04. First, we try to improve upon existing de facto classifications and propose a new statistical method for identifying de facto exchange rate regimes: observations are classified into four categories: float, managed float, crawling peg and peg. The procedure includes several successive steps: taking into account the trends in the exchange rate levels, comparing the variances in the exchange rates and forex reserves changes to a benchmark sample of floating currencies. Devaluation periods are also identified. This method yields quarterly results that are checked to be consistent with common knowledge. Second, we use this classification for assessing the effects of exchange rates regimes on inflation and growth. We perform pooled regressions with lagged exchange rate regimes dummies and several control variables. Results show that pegs are associated with weaker growth than floating exchange rate regimes. Results on inflation are more questionable, as an endogeneity bias is not excluded.