Exchange rate regimes and unemployment

Reference:

Feldmann, H., 2012. Forthcoming. Exchange rate regimes and unemployment. Open Economies Review

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Official URL:

http://dx.doi.org/10.1007/s11079-012-9249-1

Abstract

Using data on 78 countries over 1980 to 2008 and a host of controls, this paper finds that switching from a floating regime to a pegged or an intermediate regime is likely to substantially reduce unemployment. Using a three-way regime classification, the estimated effect of switching to a pegged (to an intermediate) regime is around two percentage points (around one percentage point) after 2 years. These results are robust to variations in both specification and three-way classification. When using a four-way classification, we find evidence that switching from a float to a hard peg is most likely to reduce unemployment.

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