Currency Crises, Exchange Rate Regimes, and Capital Account Liberalization: A Duration Analysis Approach

Mohammad Karimi () and Marcel Voia
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Mohammad Karimi: Department of Economics, University of Ottawa, https://sites.google.com/site/mohammadkarimizarkani/home

No 11-12, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: This paper empirically analyzes the effect of exchange rate regimes and capital account liberalization policies on the occurrence of currency crises for 21 countries over the period of1970-1998. We examine changes of the likelihood of currency crises under de jure, and de facto exchange rate regimes. We also test whether the impact of the exchange rate regimes on currency stability would be different under free and restricted capital flows. Our findings show that the likelihood of currency crises changes significantly under de facto regimes. However, the results are sensitive to the choice of de facto exchange rate arrangements. Furthermore, in our sample, capital control policies appear to be helpful in preventing low duration currency crises. The results are robust to a wide variety of sample and models checks.

JEL-codes: F31 F32 F33 G01 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2011-11-28
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Citations: View citations in EconPapers (5)

Published: Carleton Economic Papers

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Chapter: Currency Crises, Exchange Rate Regimes and Capital Account Liberalization: A Duration Analysis Approach (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:car:carecp:11-12

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