IMF
Post-Crisis Exchange Rate Policy In Five Asian Countries: Filling in the "Hollow Middle"?
Email address: lhernandez3@imf.org
JEL Classifications: F31, E65
Abstract:
Following the 1997-98 Asian financial crisis, countries in Asia moved toward either of the polar cases, giving support to the bipolar view or Hollow Middle hypothesis of exchange rate regimes in a financially integrated world. Knowledgeable observers have claimed that the crisis countries in Asia are following the same policies in the post-crisis than they did in the pre-crisis period, however. This paper sheds some light on this debate by analyzing the evidence. We conclude that except for Malaysia, which adopted a hard peg and imposed capital controls, the other crisis countries in Asia are floating more than before, though less than pure floaters do. Furthermore, we find some rationale for what these five countries are doing in the post-crisis period, that is, there are second-best arguments to fill in the ihhollow middlelw. These arguments can be extended to other developing countries.
PDF file of paper: hernandez.pdf
Session: Currency Crisis
Time: Sunday, 8 July, 2:15pm - 3:45pm
Room: E