Pick Your Poison: The Exchange Rate Regime and Capital Account Volatility in Emerging Markets

WPIEA0922003 Image
Price:  $15.00

Author/Editor: Shigeru Iwata, Evan Tanner
Release Date: © May, 2003
ISBN : 978-1-45185-161-8
Stock #: WPIEA0922003
Stock Status: On back-order

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We characterize a country's exchange rate regime by how its central bank channels a capital account shock across three variables: exchange depreciation, interest rates, and international reserve flows. Structural vector autoregression estimates for Brazil, Mexico, and Turkey reveal such responses, both contemporaneously and over time. Capital account shocks are further shown to affect output growth and inflation. The nature and magnitude of these effects may depend on the exchange rate regime.


Balance of payments , Capital account

More publications in this series: Working Papers

More publications by: Shigeru Iwata ; Evan Tanner