Why the Middle is Unstable: The Political Economy of Exchange Rate Regimes and Currency Crises

World Economy ◽  
2007 ◽  
Vol 30 (5) ◽  
pp. 709-732 ◽  
Author(s):  
Thomas D. Willett
Keyword(s):  
Political Economy ◽  
Exchange Rate ◽  
Currency Crises ◽  
Exchange Rate Regimes ◽  
The Political

The political economy of exchange rate regimes in developed and developing countries

2012 ◽  
Vol 28 (1) ◽  
pp. 38-53 ◽  
Author(s):  
Aziz N. Berdiev ◽  
Yoonbai Kim ◽  
Chun Ping Chang
Keyword(s):  
Political Economy ◽  
Developing Countries ◽  
Exchange Rate ◽  
Exchange Rate Regimes ◽  
The Political

scholarly journals The Political Economy of Exchange Rate Regimes in Transition Economies

2008 ◽  
Author(s):  
Jeffry Frieden ◽  
David A. Leblang ◽  
Neven T. Valev
Keyword(s):  
Political Economy ◽  
Exchange Rate ◽  
Transition Economies ◽  
Exchange Rate Regimes ◽  
The Political

scholarly journals The political economy of exchange rate regimes in transition economies

2009 ◽  
Vol 5 (1) ◽  
pp. 1-25 ◽  
Author(s):  
Jeffry Frieden ◽  
David Leblang ◽  
Neven Valev
Keyword(s):  
Political Economy ◽  
Exchange Rate ◽  
Transition Economies ◽  
Exchange Rate Regimes ◽  
The Political

scholarly journals The Political Economy of Exchange Rate Regimes: Evidence from Hong Kong and Taiwan

2002 ◽  
Vol 16 (1) ◽  
pp. 1-15 ◽  
Author(s):  
Kenneth S. Lin ◽  
Hsiu-Yun Lee
Keyword(s):  
Political Economy ◽  
Hong Kong ◽  
Exchange Rate ◽  
Exchange Rate Regimes ◽  
The Political

The Global Political Economy of Exchange Rates

2010 ◽  
Author(s):  
Michael G. Hall
Keyword(s):  
Political Economy ◽  
Exchange Rate ◽  
International Relations ◽  
Exchange Rates ◽  
Exchange Rate Regimes ◽  
The Political ◽  
Field Of Study ◽  
Optimal Currency Area ◽  
Currency Area

The political economy of exchange rates is a scholarly field of study that examines why governments adjust the value of their currencies, choose to have the exchange rate fix or float in its value, or agree or disagree on international rules for the exchange rate. Modern research on this field of study began in the 1970s and has developed several theories to examine these questions over the past decades. Economic theories of exchange rate regimes frequently cite three economic models, the Mundell-Fleming model, optimal currency area theory, and the time-inconsistency problem. International relations theories have focused on the global political economy of regimes, including the role of hegemonic leadership in shaping regimes and resolving disputes, the role of interstate negotiation in the formation and maintenance of regimes. The analysis of negotiation saw contributions from three major traditions of international relations theory: neo-liberalism, realism, and constructivism. Research into second major topic, domestic exchange rate regimes, examines how governments make these decisions. During the 1990s, recognition that governments’ de jure commitment to fixed, floating, or other form of exchange rate did not necessarily correspond to actual practice initiated a new round of research. Scholarly engagements with this puzzle include optimal currency area theory, national interest-based approaches, and national identity-based approaches. There has also been scholarship on the conundrum of de jure v. de facto exchange rate regimes. Another area of research, exchange rate valuation, breaks down into sectoral interest-group approaches focused on production and finance, institutional approaches focused on elections and central bank independence, and some ideational approaches focused on economic and political ideology. Anticipated areas of future research include further development of the political economy of exchange rate valuation regimes; inquiry into the interaction of the spread of populist nationalist movements and exchange rates, leading possibly to more mercantilist valuation policies; and investigation of the length of time governments choose to fix or float their exchange rates.

Policy Inconsistencies and the Political Economy of Currency Crises

2017 ◽  
Vol 08 (01) ◽  
pp. 1750004 ◽  
Author(s):  
Puspa D. Amri ◽  
Thomas D. Willett
Keyword(s):  
Political Economy ◽  
Economic Policy ◽  
Exchange Rate ◽  
Currency Crises ◽  
Economic Models ◽  
Future Research ◽  
The Political ◽  
Formal Models

Formal models of currency crises have shown that inconsistencies between countries' domestic and exchange rate policies are a major cause of currency crises. To understand why such prolonged inconsistencies exist, we need to go beyond standard economic models and take political economy and behavioral considerations into account. We sketch out ways in which such considerations can be taken into account and highlight recent research that is useful for this project. We also offer some directions for future research and a brief guide to the empirical identification of currency crises and to the measurements of some of the relevant political and economic policy variables.

Book Reviews

2015 ◽  
Vol 53 (2) ◽  
pp. 365-367
Keyword(s):  
United States ◽  
Political Economy ◽  
Exchange Rates ◽  
Latin American ◽  
Currency Crises ◽  
The United States ◽  
Exchange Rate Policy ◽  
Monetary Integration ◽  
The Political ◽  
Currency Policy

Benjamin J. Cohen of University of California, Santa Barbara reviews “Currency Politics: The Political Economy of Exchange Rate Policy”, by Jeffry A. Frieden. The Econlit abstract of this book begins: “Analyzes the politics surrounding exchange rates, including the influence of industries on the political process. Discusses the political economy of currency choice; a theory of currency policy preferences; the United States─from greenbacks to gold, 1862-79; the United States─silver threats among the gold, 1880-96; European monetary integration─from Bretton Woods to the euro and beyond; Latin American currency policy, 1970-2010; the political economy of Latin American currency crises; and the politics of exchange rates─implications and extensions.” Frieden is Professor of Government at Harvard University.

The Political Economy of the Profitability Crisis in Britain

2021 ◽  
pp. 45-68
Author(s):  
Jack Copley
Keyword(s):  
Political Economy ◽  
Currency Crises ◽  
Financial Liberalization ◽  
The Political ◽  
Historical Overview ◽  
Global Competitiveness ◽  
High Inflation ◽  
Current Account Imbalances ◽  
Economic Boom ◽  
Acute Crisis

This chapter provides a historical overview of the profitability crisis that undermined the postwar economic boom, gave rise to the phenomenon of stagflation, and ultimately drove the financial liberalizations explored in this book. This chapter puts forward a novel historical categorization of British stagflation, by identifying two distinct phases within Britain’s experience of the global profitability crisis. The first, from 1967 to 1977, was characterized by low rates of profit, rising inflation, and repeated current account imbalances that resulted in currency crises. The second, from 1977 to 1983, still saw low profitability and high inflation, but the rising price of sterling ensured that there were no sterling crises. The chapter then details how governments combined governing strategies of depoliticized discipline and palliation in different ways during these two periods of acute crisis in order to navigate the contradictory imperatives of global competitiveness and domestic legitimacy. Policies of financial liberalization constituted attempts to support these strategies.

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