Abstract
This paper examines the claim that exchange rate regimes are of little salience in the transmission of global financial conditions to domestic financial and macroeconomic conditions by focusing on a sample of about forty emerging market countries over 1986 to 2013. Our findings show that exchange rate regimes do matter. The transmission of global financial shocks to domestic credit and house price growth, as well as to banking sector leverage and domestic output, is magnified under fixed exchange rate regimes relative to more flexible (though not necessarily fully flexible) exchange rate regimes.
© 2019 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
2019
The President and Fellows of Harvard College and the Massachusetts Institute of Technology
You do not currently have access to this content.