The duration of fixed exchange rate regimes

5.1 Descriptive analysis

The full sample between January 1974 and December 2001 yields 87 durations for 58 coun-
tries. Fifty-one observations correspond to regimes that have ended before or in December
2001, and the remaining 36 observations are right-censored. We disaggregate this num-
ber between developed and emerging economies³ . Table 1 provides summary statistics
(expressed in months) on durations for the two different types of countries.

Table 1: Summary statistics for durations (expressed in months)

Regimes can last for a very long period of time. Fourteen countries exhibit a fixed
exchange rate during our entire sample. Regimes can also be very short, lasting three
months. The mean for the full sample of countries equals 140 months, about 12 years.
This number is in line with Husain, Mody and Rogoff (2004), and contradicts previous
studies on the evolution of exchange rate regimes. Klein and Marion (1997) report a mean
duration of 32 months. The difference reflects the underlying definition of an exchange
rate regime. We focus on exchange rate regimes whereas previous studies focus on short-
term exchange rate spells. Moreover, fixed exchange regimes in the developed world last

³Developed economies include Australia, Austria, Belgium, Canada, Cyprus, Denmark, Finland,
France, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Netherlands, New Zealand, Norway,
Portugal, Singapore, Slovenia, Spain, Sweden, Switzerland, United Kingdom, and United States. Emerg-
ing markets include Argentina, Brazil, Bulgaria, Chile, China, Colombia, Czech Republic, Ecuador, Egypt,
Estonia, Hungary, India, Indonesia, Israel, Jordan, Korea, Latvia, Lithuania, Malaysia, Mexico, Morocco,
Pakistan, Peru, Philippines, Poland, Romania, Russia, Slovak Republic, Thailand, Turkey, Uruguay, and
Venezuela.

14

<<   <   13   14   15   16   17   18   19   >   >>