To Peg or Not to Peg : A Template for Assessing the Nobler

WPIEA2006054 Image
Price:  $15.00

Author/Editor: Aasim M Husain
Release Date: © February, 2006
ISBN : 978-1-45186-314-7
Stock #: WPIEA2006054
Stock Status: On back-order

Languages and formats available



This paper proposes a template for assessing whether or not a country's economic and financial characteristics make it an appropriate candidate for a pegged exchange rate regime. The template employs quantifiable measures of attributes-trade orientation, financial integration, economic diversification, macroeconomic stabilization, credibility, and "fear-offloating" type effects-that have been identified in the literature as key potential determinants of regime choice. To illustrate, the template is applied to Kazakhstan and Pakistan. The results indicate a fairly strong case against a pegged regime in Pakistan. The implications for Kazakhstan are mixed, although changes in that economy in recent years strengthen the case against a peg.


Economic policy , Foreign exchange , Monetary policy

More publications in this series: Working Papers

More publications by: Aasim M Husain