After the Deluge: Do Fixed Exchange Rates Allow Inter-Temporal Volatility Tradeoffs?
18 Pages Posted: 10 Jul 2000 Last revised: 10 Oct 2022
Date Written: August 1995
Abstract
This paper addresses the issue of whether regimes of fixed exchange rates are a mechanism for shifting volatility inter- temporally. Using a panel of data covering twenty industrialized countries from 1959 through 1993, I examine the volatilities of a host of real and monetary variables. Graphical and statistical examination of the periods around 33 flotations and 81 devaluations reveals little evidence of significant increases in volatility following these events.
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