On the determinants of aggregate currency mismatch

Seung-Gwan Baek

Journal of Policy Modeling, 2013, vol. 35, issue 4, 623-637

Abstract: This paper examines the determinants of aggregate currency mismatch using the panel data set of Lane and Shambaugh, covering 97 countries over 1990–2004. The estimation results show that both domestic and international factors matter. Strengthening domestic policies and institutions is necessary but not sufficient for controlling currency mismatches in developing and emerging economies. A country should be financially liberalized and open, develop domestic securities markets, prudentially supervise financial intermediaries, upgrade institutional quality, and adopt credible monetary policies. However, a choice of exchange-rate regime does not impact currency mismatching.

Keywords: Currency mismatch; Financial reform; Institutional quality (search for similar items in EconPapers)
JEL-codes: F30 F31 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:35:y:2013:i:4:p:623-637

DOI: 10.1016/j.jpolmod.2012.05.018

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