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Understanding Exchange Rate Policy Announcements: A Political Economy Approach

Author(s): Wagner, Alexander F.

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dc.contributor.authorWagner, Alexander F.-
dc.date.accessioned2024-08-20T16:47:05Z-
dc.date.available2024-08-20T16:47:05Z-
dc.date.issued2003en_US
dc.identifier.urihttp://arks.princeton.edu/ark:/88435/pr1dr2p87g-
dc.description.abstractThe stability of the international financial system depends on the consistency of announcements, beliefs, and actions by countries and international organizations like the IMF. This article considers the first element in this trinity and analyzes the incentives of a rational policy maker to announce a fixed or flexible exchange rate regime. In a cross-sectional analysis for the 1990s, I find that countries with a non-functioning legal system, a low degree of the rule of law, high expropriation risk, low infrastructure quality and similar characteristics are more likely to announce fixed exchange rates. This result is consistent with a theoretical argument about announcing a fixed regime as a signal of “goodness” to the international community.en_US
dc.language.isoen_USen_US
dc.relation.ispartofJournal of Public and International Affairsen_US
dc.rightsFinal published version. Article is made available in OAR by the publisher's permission or policy.en_US
dc.titleUnderstanding Exchange Rate Policy Announcements: A Political Economy Approachen_US
dc.typeJournal Articleen_US

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