Post-Crisis Exchange Rate Policy in Five Asian Countries: Filling in the "Hollow Middle"?

November 1, 2001

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Format: Chicago

Leonardo Hernández, and Peter J Montiel. Post-Crisis Exchange Rate Policy in Five Asian Countries: Filling in the "Hollow Middle"?, (USA: International Monetary Fund, 2001) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Following the 1997-98 financial turmoil, crisis countries in Asia moved toward either floating or fixed exchange rate systems, reinforcing the bipolar view of exchange rate regimes and the "hollow middle" hypothesis. But some academics have claimed that the crisis countries' policies have been similar in the post- and pre-crisis periods. This paper analyzes the evidence and concludes that, except for Malaysia, which adopted a hard peg and imposed capital controls, the other crisis countries are floating more than before, though less than "real" floaters do. Further, the crisis countries' policies during the post-crisis period can be justified on second-best arguments.

Subject: Currency markets, Exchange rate arrangements, Exchange rate policy, Exchange rates, Financial crises, Financial markets, Foreign exchange

Keywords: Asia and Pacific, Crisis country, Crisis exchange rate policy, Currency markets, Exchange rate arrangements, Exchange rate fluctuation, Exchange rate movement, Exchange rate policy, Exchange rate regime, Exchange rate variability, Exchange rates, Foreign exchange market, Regime continuum, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/170
Stock No:

WPIEA1702001
ISBN:

9781451858426
ISSN:

1018-5941

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