Research and Publications
Journal Articles
Fear of Floating and Pegging. A Simultaneous Choice Model of De-jure and De-facto Exchange Rate Regimes in Developing Countries
2009, Open Economies Review
Jürgen von Hagen, Jizhong Zhou
Abstract
We present an analysis of the determinants of de jure and de facto exchange rate regimes based on a panel probit model with simultaneous equations. The model is estimated using simulation-based maximum likelihood methods. The empirical results suggest a triangular structure of the model such that the choice of de facto regimes depends on the choice of de jure regimes but not vice versa. This gives rise to a novel interpretation of regime discrepancies.
Citation
von Hagen, Jürgen and Jizhong Zhou (2009), “Fear of Floating and Pegging. A Simultaneous Choice Model of De-jure and De-facto Exchange Rate Regimes in Developing Countries,” Open Economies Review, Vol. 20, No. 3, pp. 293-315.
Keywords
de facto exchange rate regimes, developing countries and simultaneous equations
