High Interest Rates and Exchange Rate Stabilization in Korea, Malaysia, and Thailand: An Empirical Investigation of the Traditional and Revisionist Views |
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| Authors: | Robert Dekle Cheng Hsiao & Siyan Wang |
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| Institution: | Department of Economics, University of Southern California, Los Angeles, CA 90089-0253, USA,;Department of Economics, School of Finance, University of Hong Kong, and University of Southern California,;Department of Economics, University of Delaware, Newark, DE 19716, USA |
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| Abstract: | The paper seeks to determine whether high interest rates have had the effect of appreciating nominal exchange rates in three Asian countries. The authors use high-frequency data for Korea, Malaysia, and Thailand during the recent crisis and its aftermath to examine the relationship between the increase in interest rates and the behavior of exchange rates. It is found that raising interest rates has had a small impact on nominal exchange rates during the crisis period. |
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