Are consistent pegs really more prone to currency crises?

This paper empirically evaluates the treatment effect of consistent pegs (i.e., the policy that countries claim to have pegged regimes and actually adopt the announced pegged regimes) on the occurrence of currency crises to examine whether consistent pegs are indeed more prone to currency crises than other regimes. To estimate the treatment effect of consistent pegs properly, we must carefully control for the self-selection problem of regime adoption because a country\u27s exchange rate regime choice is non-random. We thus use matching estimators as a control for the self-selection problem. We find interesting and robust evidence that consistent pegs significantly decrease the probability of currency crises compared with other exchange rate policies

Sterilization and the capital inflow problem in East Asia, 1987-97

노트 : Volume Title: Regional and global capital flows: Macroeconomic causes and consequences Chapter Title: Sterilization and the capital inflow problem in East Asia, 1987-9

Do hard pegs avoid currency crises? An evaluation using matching estimators

Using the bias-corrected matching estimators of Abadie and Imbens (2006) as a control for the self-selection problem of regime adoption, we estimate the average treatment effect of hard pegs on the occurrence of currency crises. We find evidence that hard pegs significantly decrease the likelihood of currency crises compared with other regimes

Do consistent Pegs matter? Deviations of actual exchange rate regimes form announced exchange rate regimes and currency crises

This paper uses probit models to empirically investigate whether deviations of actual exchange rate regimes from announced exchange rate regimes affect the occurrence of currency crises in 84 countries over the period 1980-2001. We use the relationship between the de jure IMF classification and the de facto Reinhart and Rogoff (2004) classification as an indicator of the discrepancy between announced regimes and actual regimes. The main results are as follows: (1) countries with a “fear of announcing a peg” policy (i.e., the policy that countries actually adopt pegged regimes without actually claiming to have pegged regimes) have a significantly higher probability of currency crises than countries with consistent pegs (i.e., the policy that countries claim to have pegged regimes and actually adopt the announced pegged regimes);(2) countries with a “fear of pegging” policy(i.e., the situation in which countries actually adopt floating regimes but claim to have pegged regimes) have a significantly higher probability of currency crises than those with consistent pegs;(3) countries with consistent floats(i.e., the policy that countries claim to have floating regimes and actually adopt the announced floating regimes) have a significantly higher probability of currency crises than those with consistent pegs; and(4) countries with consistent pegs have the lowest statistically significant risk of currency crises as compared with other exchange rate policies. These results are robust to a wide variety of samples. Hence, we can reasonably conclude that countries that in fact maintain announced pegged regimes are least prone to currency crises because they can enhance greater credibility in their currencies by sustaining their commitment to pegged regimes.文部科学省科学研究費（若手研究(B)）2005年度～2007年度、研究課題番号：17730166文部科学省科学研究費（若手研究(B)）2008年度～2009年度、研究課題番号：2073021

De facto exchange rate regimes and currency crises : are Pegged regimes with capital account liberalization really more prone to speculative attacks?

This paper empirically examines whether de facto exchange rate regimes affect the occurrence of currency crises in 84 countries over the 1980-2001 period by using the probit model. We employ the de facto classification of Reinhart and Rogoff (2004) that allows us to estimate the impact of relatively long exchange rate regimes on currency crises with much greater precision. We find that pegged regimes significantly decrease the likelihood of currency crises compared with floating regimes. By using the combined data of exchange rate regimes and the existence of capital controls, we also find interesting evidence that pegged regimes with capital account liberalization significantly lower the likelihood of currency crises compared with other regimes. These results are robust to a wide variety of samples. From the standpoint of the macroeconomic policy trilemma, we can conjecture that pegged regimes with capital account liberalization are substantially less prone to speculative attacks, because they can enhance greater credibility in their currencies by abandoning monetary policy autonomy.文部科学省科学研究費（若手研究(B)）2005年度～2007年度、研究課題番号：17730166文部科学省科学研究費（若手研究(B)）2008年度～2009年度、研究課題番号：2073021

Evaluating the effect of de facto pages on currency crises using matching methods

This paper empirically evaluates the treatment effect of de facto pegged regimes on the occurrence of currency crises. To estimate the treatment effect of pegged regimes properly, we must carefully control for the self-selection problem of regime adoption because a country\u27s exchange rate regime choice is nonrandom. However, because previous studies do not explicitly address this problem, these studies can lead to biased estimates of treatment effects. To address the self-selection problem, we thus employ a variety of propensity score matching methods. In addition, we use the covariate matching method of Abadie and Imbens (2006) to test the robustness of the results in propensity score matching methods. We find interesting and robust evidence that (1) pegged regimes significantly decrease the likelihood of currency crises compared with floating regimes, and (2) pegged regimes with capital account liberalization significantly lower the likelihood of currency crises compared with other regimes

De facto exchange rate regimes and currency crises: Are pegged regimes with capital account liberalization really more prone to speculative attacks?

This paper empirically examines whether de facto exchange rate regimes affect the occurrence of currency crises in 84 countries over the 1980-2001 period by using the probit model. We employ the de facto classification of Reinhart and Rogoff (2004) that allows us to estimate the impact of relatively long-lived exchange rate regimes on currency crises with much greater precision. We find that pegged regimes significantly decrease the likelihood of currency crises compared with floating regimes. By using the combined data of exchange rate regimes and the existence of capital controls, we also find interesting evidence that pegged regimes with capital account liberalization significantly lower the likelihood of currency crises compared with other regimes. These results are robust to a wide variety of samples and models. From the standpoint of the macroeconomic policy trilemma, we can conjecture that pegged regimes with capital account liberalization are substantially less prone to speculative attacks because they can enhance greater credibility in their currencies by abandoning monetary policy autonomy.Exchange rate regimes Capital controls Capital account liberalization Currency crises Macroeconomic policy trilemma