Title Will you buy my peg? : the credibility of a fixed exchange rate regime as a determinant of bilateral trade / prepared by Bernhard Fritz-Krockow and Emilia Magdalena Jurzyk

Published [Washington, D.C.] : International Monetary Fund, ©2004

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Description 1 online resource (24 pages) Series IMF working paper ; WP/04/165 IMF working paper ; WP/04/165. Contents Contents -- I. INTRODUCTION -- II. EXCHANGE RATE REGIMES AND TRADE -- A. The Gravity Model and the Exchange Rate Arrangements -- B. Specification of the Model -- C. Data Sources and Definition of Variables -- D. Multicollinearity Tests -- III. EMPIRICAL RESULTS -- A. Single-Year Data Estimation with OLS -- B. Averaged Data Estimation Using OLS -- C. Robustness of the Results -- IV. CONCLUSIONS -- References Summary This paper examines the relationship between fixed exchange rate arrangements and trade using a gravity model of international trade together with bilateral trade data from 24 countries from the Caribbean and Latin America for the period 1960-2001. The analysis indicates that a credible fixed peg has a positive impact on the value of bilateral trade. Moreover, the positive impact on trade is more pronounced with a stricter definition of the fixed peg or a longer duration of the peg. This supports the argument that the credibility of an exchange rate peg is an important element to determine bilateral trade. There is, however, no evidence to suggest that a currency union provides additional benefits Bibliography Includes bibliographical references Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Foreign exchange administration -- Caribbean Area Foreign exchange administration -- Latin America International trade. Foreign exchange administration International trade Caribbean Area Latin America Form Electronic book Author Jurzyk, Emilia Magdalena, author. International Monetary Fund. Western Hemisphere Department, issuing body. ISBN 1283568349 9781283568340 9781451980066 145198006X 9781451903300 1451903308

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