Currency regimes and external competitiveness: the role of institutions, trade agreements and monetary frameworks
研究了1975-2014年35个发展中国家的货币制度如何影响汇率失调，发现中间汇率制度在金融开放度高时能减少失调，非互惠贸易协定改善价格竞争力，而固定汇率制度在制度质量高或采用通胀目标制的国家中失调更少。
Abstract The literature lacks consensus on the role of currency regimes in explaining external competitiveness. Countries not only differ in terms of currency regimes, but can also have different institutional arrangements, namely trade agreements and inflation targeting (IT) frameworks in addition to the overall quality of governance. Hence, using the real effective exchange rate and by covering 35 developing countries over the period 1975–2014, we investigate the role of currency regimes in explaining the degree of misalignment while considering institutional factors. First, we find that intermediate regimes limit the currency misalignment with greater financial openness (FO). Second, non-reciprocal preferential trade agreements improve price competitiveness, whereas free trade and reciprocal ones can only be beneficial with a higher degree of FO. Third, misalignments in fixed regimes decline in the presence of stronger institutions or in countries with an IT type of monetary policy framework. The above results remain robust to alternative specifications.