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De facto and official exchange rate regimes in transition economies
Affiliation:1. Center for European Integration Studies (ZEI), University of Bonn, Walter-Flex-Strasse 3, D-53113 Bonn, Germany;2. Indiana University, IN, USA;3. CEPR, University of Bonn, Germany;4. Shanghai University of Finance and Economics, Shanghai, PR China;1. School of business administration, South China University of Technology, Guangzhou, 510641, China;2. School of Finance, Zhejiang University of Finance and Economics, Hangzhou, 310018, China;3. China Academy of Financial Research, Zhejiang University of Finance and Economics, Hangzhou, 310018, China;1. Department of Engineering, Faculty of Technology, De Montfort University, Leicester LE1 9BH, UK;2. Institute of Physical Chemistry PAS, Kasprzaka 44/52, 01-224 Warszawa, Poland;1. China Economics and Management Academy, Central University of Finance and Economics, Beijing, China;2. College of Mathematics and Information Science, Shandong Institute of Business and Technology, Yantai, China
Abstract:This paper provides an empirical investigation on the discrepancies between official and de facto exchange rate regimes in transition economies. We use a probit model to describe the determination of regime discrepancies. We find that “errors” in the selection of official regimes as well as the macroeconomic developments calling for conflicting adjustments in exchange rate regimes are important determinants of regime discrepancies.
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