Daniel’s Question

提问用粗糙的英文写成的，下面这个网址的文件制作了书签，方便阅读。请用最新版本的ACROBAT READER 打开文件。由于这个文件太大(6M以上)，所以这里只放ROGOFF的原文在附件。

(Blog: http://danielyoung.blog.sohu.com/ )

(Downloadable at http://danielyoung.blog.sohu.com/#tp_5eadc40c94a )

The Modern History of Exchange Rate Arrangements: A Reinterpretation is undoubtedly a masterpiece. One of the most remarkable conclusions that paper reached is that the inflation associated with “freely floating” is 45.5 (according to Table 8), compared with 173.9 under the former system. However, this change takes place mainly because we take the countries whose inflation rates are above 40 out of the “freely floating” group (see Appendix II, 3. The essential distinction between freely falling and freely floating). If the research were to be based on such a reclassification, would the study of exchange rate and inflation have the problem resembling endogenous sample selection? Moreover, as for the relationship between output and exchange rate regime, will there be endogeneity, since both of them are correlated with inflation? Of course, since that paper did not regress inflation (or GDP) on the exchange rate regime, there is no such econometric problem there, but how should we explore the impact of exchange rate on macroeconomic variables, based on that paper?

    It is very likely that my question itself is very stupid or wrong. Please point it out, if that is the case. Thank you very much!

After raising such a question, let me be clear that this paper is really great. By using the market determined exchange rates and newly designed statistical standards, it shows us a wholly different picture about exchange rate and other critical variables. Even if my doubt is reasonable, it still tells us a lot about whether the break down of Bretton Woods should be seen as the structural change in the history of exchange rate system. It still provides us with a comprehensive analysis of what is the actual exchange rate regime, no matter what government claims.

In addition, I put together some relevant papers, hoping that would be helpful.

1, The Modern History of Exchange Rate Arrangements: A Reinterpretation Carmen M. Reinhart Kenneth S. Rogoff

2, A Modern History of Exchange Rate Arrangements: Parallel Markets and Dual and Multiple Exchange Rates Reinhart, Carmen

3, The Mirage of Fixed Exchange Rates

Maurice Obstfeld and Kenneth Rogoff

4, BUSINESS CYCLES AND THE EXCHANGE RATE SYSTEM: SOME INTERNATIONAL EVIDENCE

Marianne Baxter Alan C. Stockman

5, FIXING EXCHANGE RATES:A Virtual Quest for Fundamentals

Robert P. Flooda and Andrew K. Roseb*

6, The Case For Flexible Exehange Rates, 1969

HARRY C. JOHNSON

7, 汇率制度分类理论述评 陈三毛

8， A primer on exchange rates By Milton Friedman