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Projects - Details  
  Exchange Rate Regimes: Choices and Consequences in a Global Economy

Dr Christopher Meissner
University of Cambridge

Dr Christopher Meissner
Faculty of Economics and Politics
University of Cambridge
Austin Robinson Building
Sidgwick Avenue

Tel: 01223 335235
email: chris.meissner@econ.cam.ac.uk

Duration of Research
October 2004 - September 2006

This project comprises four main questions. First we study the interaction between currency stability and sovereign risk. When do countries' exchange rate policies have an impact on the ability to repay foreign debt? We first assess the relationship between these types of risk through an event study, and then compare the estimated relationships across a large number of countries and colonies between 1870 and 1913.

In a related project, we examine the link between the exchange rate regime, external debt and financial crises during the late nineteenth century. We examine whether foreign currency debt for countries in the face of global capital flows made them more likely to face a crisis. Our initial results suggests institutions and other fundamental factors that matter most.

Two other projects look at exchange rate regime choice and regime collapse between 1950 and the present. We investigate the choice of anchor currency choice and propose to explain why so few currencies are used as anchors. We appeal to theories of fixed versus floating rates but also find that optimal currency area criteria matter. Importantly network externalities are present. Finally we investigate the duration of pegged exchange rate regimes.

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Last updated November 2005
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