Matches in SemOpenAlex for { <https://semopenalex.org/work/W3126011138> ?p ?o ?g. }
- W3126011138 abstract "If governments choose economic policies that often run counter to their public commitments, are those commitments meaningless? We argue that government proclamations can be critical in signaling economic policy intentions. We focus on the realm of exchange rate policy, in which countries frequently implement an exchange rate regime that differs from the officially declared regime. We argue that the official exchange rate regime is one of the most important signals of a government's economic policy preferences. When a government makes a de jure public commitment to a fixed exchange rate, it sends a signal to domestic and international markets of its strict monetary-policy priorities. In contrast, a government that proclaims a floating exchange rate signals a desire to retain discretion over monetary policy, even if it has implemented a de facto fixed rate. We use data on up to 110 developed and developing countries from 1974-2004 to test two hypotheses: first, that governments that adopt de facto fixed exchange rates will experience less inflation when they back up their actions with official declarations; and second, that governments that abide by their commitments - as demonstrated by a history of following through on their public declarations of a fixed exchange rate regime - will establish greater inflation-fighting credibility. Within developing countries, democratic institutions enhance this credibility. Results from fixed-effects econometric models provide strong support for our hypotheses." @default.
- W3126011138 created "2021-02-01" @default.
- W3126011138 creator A5052633066 @default.
- W3126011138 creator A5079402368 @default.
- W3126011138 date "2009-06-02" @default.
- W3126011138 modified "2023-09-23" @default.
- W3126011138 title "Exchange Rate Proclamations and Inflation-Fighting Credibility" @default.
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