Domestic pressures and the exchange rate regime: why economically bad decisions are politically popular?





Every currency crisis brings with it a discussion on the optimal choice of the exchange rate regime. This literature is characterised by an exclusive focus on this single policy issue whilst taking other institutional choices as given. The authors attempt to develop an approach which incorporates a simultaneous choice of three major institutional elements that are germane to this issue and which affect social welfare.


JEL Codes:


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How to Cite

GRÜNER, H., & HEFEKER, C. (2013). Domestic pressures and the exchange rate regime: why economically bad decisions are politically popular?. PSL Quarterly Review, 48(194).