Economic integration and the exchange rate regime: how damaging are currency crises? : [This Version: October 2003]
- We use consumer price data for 205 cities/regions in 21 countries to study PPP deviations before, during and after the major currency crises of the 1990s. We combine data from industrialized nations in North America (Unites States, Canada and Mexico), Europe (Germany, Italy, Spain and Portugal), Asia (Japan and South Korea), and Oceania (Australia and New Zealand) with corresponding data from emerging market economies in South America (Argentina, Bolivia, Brazil, Columbia) and Asia (India, Indonesia, Malaysia, Philippines, Taiwan, Thailand). By doing so, we confirm previous results that both distance and border explain a significant amount of relative price variation across different locations. We also find that currency attacks had major disintegration effects by considerably increasing these border effects and by raising within-country relative price dispersion in emerging market economies. These effects are found to be quite persistent since relative price volatility across emerging markets today is still significantly larger than a decade ago.
Author: | Axel A. Weber, Günter W. Beck |
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URN: | urn:nbn:de:hebis:30-9909 |
Parent Title (German): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2001,13 - revised |
Series (Serial Number): | CFS working paper series (2001, 13) |
Document Type: | Working Paper |
Language: | English |
Year of Completion: | 2003 |
Year of first Publication: | 2003 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2005/06/13 |
Tag: | contagion; currency crisis; law of one price; purchasing power parity; real exchange rate volatility; relative price volatility; spatial data |
GND Keyword: | Verbraucherpreis; Währungskrise |
Issue: | This Version: October 2003 |
Page Number: | 77 |
Note: | This Version: October 2003 First Version: November 2001 |
Source: | CFS working paper ; 2001,13 revised |
HeBIS-PPN: | 20155223X |
Institutes: | Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Licence (German): | Deutsches Urheberrecht |