nep-ifn New Economics Papers
on International Finance
Issue of 2011‒11‒21
one paper chosen by
Ajay Shah
National Institute of Public Finance and Policy

  1. Exchange Rate Regimes and Monetary Independence in East Asia By Chang-Jin Kim; Jong-Wha Lee

  1. By: Chang-Jin Kim (KIEP - Korea Institute for International Economic Policy); Jong-Wha Lee
    Abstract: This paper examines whether changes in exchange rate arrangements have affected monetary independence in East Asian countries after the 1997 Asian crisis. We find that the sensitivity of local to U.S. interest rates has declined for many Asian countries since they adopted floating exchange rate regimes after the crisis. This empirical finding suggests that the choice of exchange rate regime is an important factor for the independence of monetary policy. Floating regimes appear to offer East Asian countries at least some degree of monetary independence after the East Asian crisis.
    Keywords: exchange rate regime, monetary independence, East-Asia
    JEL: F31 O24 O23
    Date: 2011–12

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