Publications

Professor Klein Explores the "Exchange Rate Regimes in the Modern Era"

MIT Press

Summary - The choice of an exchange rate regime is one of a government’s key economic decisions, with important implications for macroeconomics, trade, and political economy. Exchange rate regime experiences since 1973 are distinguished from past experiences, such as those during the classical Gold Standard period (1870 – 1913) or the dollar-based Bretton Woods era (1945 – 1973) by two important features: a heterogeneous range of exchange rate regime choices, even within subgroups such as industrial countries or emerging market countries; and countries flipping back and forth between pegged and floating exchange rate regimes. This wide range of experiences gives researchers a colorful palette, one with enough hues to make it possible to answer interesting empirical questions about the nature and consequences of exchange rate regime choice. In Exchange Rate Experiences in the Modern Era, Klein and Shambaugh both characterize the choice of exchange rate regimes in the modern (i.e. post-Bretton Woods) era and present empirical research that demonstrates the effects of this choice on macroeconomic policy, economic performance, and international trade. This book integrates study of some of the central issues in International Finance including the choice of an exchange rate regime, the duration of that decision, the empirical relevance of the policy trilemma, and the effects of exchange rate regimes on trade, price behavior, business cycles and growth.