See, among others, Barry Eichengreen, Toward a New International Financial Architecture: A Practical Post-Asia Agenda (Washington: Institute for International Economics, 1999); Morris Goldstein, Safeguarding Prosperity in a Global Financial System: The Future International Financial Architecture (Washington: IIE, 1999), and, more cautiously, Stanley Fischer, “Reforming World Finance: Lessons from a Crisis,” The Economist, October 3, 1998. This “bipolar view” goes back to Eichengreen, International Monetary Arrangements for the 21st Century (Washington: Brookings Institution, 1994).
Bijan Aghevli, Mohsin Khan, and Peter Montiel, “Exchange Rate Policy in Developing Countries: Some Analytical Issues,” IMF Occasional Paper No. 78, 1991.
Goldstein (1999), p. 106.
Jeffrey Frankel, “No Single Currency Regime is Right for All Countries of at All Times,” NBER Working Paper No. 7338, 1999; John Williamson, Exchange Rate Regimes for Emerging Markets: Reviving the Intermediate Option (Washington: IIE, 2000).
Ricardo Hausmann, Michael Gavin, Carmen Pagés, and Ernesto Stein, “Financial Turmoil and the Choice of Exchange Rate Regime,” IADB Research Department Working Paper No. 400, 1999 (the quote is from p. 11); Guillermo Calvo and Carmen Reinhart, “Fear of Floating,” NBER Working Paper No. 7993, 2000.
Stanley Fischer, “Is the Bipolar View Correct?,” draft (available on the IMF’s website, http://www.imf.org); Michael Mussa, Paul Masson, Alexander Swoboda, Esteban Jadresic, Paolo Mauro, and Andrew Berg, “Exchange Rate Regimes in an Increasingly Integrated World Economy,” IMF Occasional Paper No. 193, 2000.
Barry Eichengreen and others, “Exit Strategies: Policy Options for Countries Seeking Greater Exchange Rate Flexibility,” IMF
Paul Masson, “Exchange Rate Regime Transitions,” IMF Working Paper 00/134, 2000.
On the reasons why countries choose a particular regime, see Helene Poirson (IMF Working Paper, forthcoming).
Atish R. Ghosh, Anne-Marie Gulde, Jonathan Ostry, and Holger Wolf, “Does the Nominal Exchange Rate Regime Matter?,” IMF Working Paper 95/121, 1995. For a recent study with an alternative exchange rate regime classification and somewhat different results, see Eduardo Levy-Yeyati and Federico Sturzenegger, “Exchange Rate Regimes and Economic Performance,” IMF Staff Papers (forthcoming).
Atish Ghosh, Anne-Marie Gulde, and Holger Wolf, “Currency Boards: The Ultimate Fix?,” IMF Working Paper 98/8, 1998; idem, “Currency Boards: More than a Quick Fix?” Economic Policy, October 2000. For a model of credibility, under currency boards, see Luis Rivera Batiz and Amadou Sy, “Currency Boards, Credibility, and Macroeconomic Behavior,” IMF Working Paper 00/97, 2000.
See Ilker Domaç and Maria Soledad Martinez Pería, “Banking Crises and Exchange Rate Regimes: Is There a Link?” World Bank Working Paper 2489, 2000, and references therein.
Andrew Berg and Eduardo Borensztein, “The Pros and Cons of Full Dollarization,” IMF Working Paper 00/50, 2000.
Andrew Rose, “One Money, One Market: The Effect of Common Currencies on Trade,” Economic Policy, April 2000. For two studies evaluating the desirability of currency unions for specific regions, see Tamim Bayoumi and Paolo Mauro, “The Suitability of ASEAN for a Regional Currency Arrangement,” IMF Working Paper 99/162, 1999; and Paul Masson and Catherine Pattillo, Monetary Union in West Africa (ECOWAS): Is It Desirable and How Could It Be Achieved?, IMF Occasional Paper No. 204, 2001.
Eduardo Borensztein, Jeromin Zettelmeyer, and Thomas Philippon, “Monetary Independence in Emerging Markets: Does the Exchange Rate Regime Make a Difference?,” IMF Working Paper 01/1, 2001. Christian Broda, “Coping with Terms of Trade Shocks: Pegs vs. Floats,” in Alberto Alesina and Robert Barro eds., Currency Unions (Stanford: Hoover Institution, forthcoming) presents evidence on insulation relative to terms of trade shocks.
The latter suggests that exchange rate volatility need not “buy” lower volatility elsewhere in the economy. See Olivier Jeanne and Andrew Rose, “Noise Trading and Exchange Rate Regimes,” IMF manuscript (revised version of NBER Working Paper No. 7104, 1998) for a rationalization, and empirical evidence from industrialized countries.
Alicia Garcia-Herrero, “Banking Crisis in Latin America in the 1990s: Lessons from Argentina, Paraguay, and Venezuela,” IMF Working Paper 97/40, 1997; Burkhard Drees and Ceyla Pazarba¸sioglu, “The Nordic Banking Crises: Pitfalls in Financial Liberalization?,” IMF Occasional Paper No. 161, 1998; Tomás J.T. Baliño and Angel Ubide, “The Korean Financial Crisis of 1997: A Strategy of Financial Sector Reform, IMF Working Paper 99/28, 1999; Akihiro Kanaya and David Woo, “The Japanese Banking Crisis: Sources and Lessons,” IMF Working Paper 00/7, 2000; Juan C. Jaramillo, “An Overview of Paraguay’s Banking Crisis during the1990s,” unpublished, 2000.
Brenda Gonzáles-Hermosillo, Ceyla Pazarba¸sioglu, and Robert Billings, “Determinants of Banking Sector Fragility: A Case Study of Mexico,” IMF Staff Papers, September 1997; Alberto Ramos, “Capital Structures and Portfolio Composition During Banking Crisis: Lessons from Argentina 1995,” IMF Working Paper 98/121, 1998; May Khamis and Alfredo M. Leone, “Can Currency Be Stable Under a Financial Crisis? The Case of Mexico,” IMF Working Paper 99/53, 1999. Liliana Schumacher, “Bank Runs and Currency Runs in a System Without a Safety Net,” Journal of Monetary Economics, August 2000.
Ceyla Pazarba¸sioglu, “A Credit Crunch? A Case Study of Finland in the Aftermath of the Banking Crisis,” IMF Staff Papers, September 1997; Swati R. Ghosh and Atish R. Ghosh, “East Asia in the Aftermath: Was There a Crunch?,” IMF Working Paper 99/38, 1999; David Woo, “In Search of ‘Capital Crunch’: Supply Factors Behind the Credit Slowdown in Japan,” IMF Working Paper 99/03, 1999; Eduardo Borensztein and Jong-Wha Lee, “Financial Crisis and Credit Crunch in Korea: Evidence from Firm-Level Data,” IMF Working Papers, 00/25, 2000.
Asli Demirgüç-Kunt and Enrica Detragiache, “The Determinants of Banking Crises in Developing and Developed Countries,” IMF Staff Papers, March 1998; Edward J. Frydl, “The Length and Costs of Banking Crises,” IMF Working Paper 99/30, 1999; Marco Rossi, “Financial Fragility and Economic Performance in Developing Economies: Do Capital Controls, Prudential Regulation and Supervision Matter?,” IMF Working Paper 99/66, 1999; Daniel Hardy and Ceyla Pazarba¸sioglu, “Determinants and Leading Indicators of Banking Crises: Further Evidence,” IMF Staff Papers, September/December 1999; Qaizar Hussain and Clas Wihlborg, “Corporate Insolvency and Bank Behavior: A Study of Selected Asian Economies,” IMF Working Paper 99/135, 1999; Asli Demirgüç-Kunt and Enrica Detragiache, “Financial Liberalization and Financial Fragility,” in Boris Pleskovic and Joseph E. Stiglitz, eds., 1998 Annual World Bank Conference on Development Economics (Washington: World Bank, 1999); Brenda Gonzáles-Hermosillo, “Determinants of Ex-Ante Banking System Distress: A Macro-Micro Empirical Exploration of Some Recent Episodes,” IMF Working Paper 99/33, 1999; Asli Demirgüç-Kunt and Enrica Detragiache, “Monitoring Banking Sector Fragility: A Multivariate Logit Approach,” IMF Working Paper 99/147, 1999, published in World Bank Economic Review, May 2000; Asli Demirgüç-Kunt and Enrica Detragiache, “Does Deposit Insurance Increase Banking Sector Stability? An Empirical Investigation,” IMF Working Paper 00/3, 2000; Sonia Muñoz, “The Breakdown of Credit Relations Conditions of a Banking Crisis: A Switching Regime Approach, IMF Working Paper 00/135, 2000.
Asli Demirgüç-Kunt, Enrica Detragiache, and Poonam Gupta, “Inside the Crisis: An Empirical Analysis of Banking Systems in Distress,” IMF Working Paper 00/156, 2000.
Tito Cordella and Eduardo Levy-Yeyati, “Public Disclosure and Bank Failures,” IMF Staff Papers, March 1998; Jorge A. Chan-Lau and Zhaohui Chen, “Financial Crisis and Credit Crunch as a Result of Inefficient Financial Intermediation: With Reference to the Asian Financial Crisis,” IMF Working Paper 98/127, 1998; Haizhou Huang and Chenggang Xu, “Financial Institutions and the Financial Crisis in East Asia,” European Economic Review, April 1999; Tito Cordella and Eduardo Levy-Yeyati, “Bank Bailouts: Moral Hazard vs. Value Effect,” IMF Working Paper 99/106, 1999; Se-Jik Kim, “Bailout and Conglomeration,” IMF Working Paper 99/108, 1999; Enrica Detragiache, “Bank Fragility and International Capital Mobility,” IMF Working Paper 99/113, 1999, and forthcoming in the Review of International Economics; Charles E. Goodhart and Haizhou Huang, “A Simple Model of the Lender of Last Resort,” IMF Working Paper 00/75, 2000; Haizhou Huang and Chenggang Xu, “Financial Institutions, Financial Contagion, and Financial Crises,” IMF Working Paper 00/92, 2000; Poonam Gupta, “Aftermath of Banking Crises: Effects on Real and Monetary Variables,” IMF Working Paper 00/96, 2000.
Claudia Dziobek and Ceyla Pazarba¸sioglu, “Lessons from Systemic Bank Restructuring: A Survey of 24 Countries,” IMF Working Paper 97/161, 1997; Claudia Dziobek, “Market-Based Policy Instruments for Systemic Bank Restructuring,” IMF Working Paper 98/113, 1998; Charles Enoch, Gillian Garcia, and V. Sundararajan, “Recapitalizing Banks with Public Funds: Selected Issues,” IMF Working Paper 99/130, 1999; David Woo, “Two Approaches to Resolving Non-Performing Assets During Financial Crises,” IMF Working Paper 00/33, 2000; Gillian Garcia, “Deposit Insurance and Crisis Management,” IMF Working Paper 00/57, 2000; R. Barry Johnston, Jingquing Chai, and Liliana Schumacher, “Assessing Financial System Vulnerabilities,” IMF Working Paper 00/76, 2000; Andrew Feltenstein, “Bank Failures and Fiscal Austerity: Policy Prescriptions for a Developing Country,” IMF Working Paper 00/90, 2000; Edward J. Frydl and Marc Quintyn, “The Benefits and Costs of Intervening in Banking Crises,” IMF Working Paper 00/147, 2000.