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

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  • Post-Crisis Exchange Rate Policy in Five Asian Countries: Filling in the "Hollow Middle"?
  • Hernandez, Leonardo; Montiel, Peter
  • International Monetary Fund (IMF)


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Title Post-Crisis Exchange Rate Policy in Five Asian Countries: Filling in the "Hollow Middle"?
Similar Titles
Material Type Reports
Author(English)

Hernandez, Leonardo; Montiel, Peter

Publisher

International Monetary Fund (IMF)

Date 2001
Pages 41
Language English
File Type Link
Subject Economy < Financial Policy

Abstract

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.