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Changes in Exchange Rates in Rapidly Developing Countries

Theory, Practice, and Policy Issues

The exchange rate is a crucial variable linking a nation’s domestic economy to the international market. Thus choice of an exchange rate regime is a central component in the economic policy of developing countries and a key factor affecting economic growth.

Historically, most developing nations have employed strict exchange rate controls and heavy protection of domestic industry-policies now thought to be at odds with sustainable and desirable rates of economic growth. By contrast, many East Asian nations maintained exchange rate regimes designed to achieve an attractive climate for exports and an "outer-oriented" development strategy. The result has been rapid and consistent economic growth over the past few decades.

Changes in Exchange Rates in Rapidly Developing Countries explores the impact of such diverse exchange control regimes in both historical and regional contexts, focusing particular attention on East Asia. This comprehensive, carefully researched volume will surely become a standard reference for scholars and policymakers.

Table of Contents

Introduction, Takatoshi Ito and Anne O. Krueger
1. The Choice of Exchange Rate Regime in Developing and Middle Income Countries
Sebastian Edwards
Comment: Anne O. Krueger
Comment: Andrew K. Rose
2. Contagious Currency Crises: Channels of Conveyance
Barry Eichengreen and Andrew K. Rose
Comment: Takatoshi Ito
Comment: Ronald I. McKinnon
3. Current Account Deficits and Capital Flows in East Asia and Latin America: Are the Early Nineties Different from the Early Eighties?
Gian Maria Milesi-Ferretti and Assaf Razin
Comment: Koichi Hamada
Comment: Andrew K. Rose
4. Economic Growth and Real Exchange Rate: An Overview of the Balassa-Samuelson Hypothesis in Asia
Takatoshi Ito, Peter Isard, and Steven Symansky
Comment: Kenichi Ohno
Comment: Anne O. Krueger
5. Resource Endowments and the Real Exchange Rate: A Comparison of Latin America and East Asia
Jeffrey D. Sachs
Comment: Kazuo Ueda
6. Private Consumption, Nontraded Goods, and Real Exchange Rate: Evidence from South Korea and Taiwan
Kenneth S. Lin
Comment: Yun-Wing Sung
Comment: Gian Maria Milesi-Ferretti
7. The Yen and Its East Asian Neighbors, 1980-1995: Cooperation or Competition?
Shinji Takagi
Comment: Tetsuji Okazaki
Comment: K. C. Fung
8. Exchange Rate Pass-through and Industry Characteristics: The Case of Taiwan’s Exports of Midstream Petrochemical Products
Kuo-Liang Wang and Chung-Shu Wu
Comment: Kenichi Ohno
Comment: Y. C. Jao
9. Evaluation of Korea’s Exchange Rate Policy
Sang-Woo Nam and Se-Jong Kim
Comment: Stanley W. Black
Comment: Leonard K. Cheng
10. Issues in Korean Exchange Rate Policy
Stanley W. Black
Comment: Chong-Hyun Nam
Comment: Baekin Cha
11. Liberalization of Capital Flows in Korea: Big Bang or Gradualism?
Dongchul Cho and Youngsun Koh
Comment: Chong-Hyun Nam
Comment: Koichi Hamada
12. The Foreign Exchange Allocation Policy in Postwar Japan: Its Institutional Framework and Function
Tetsuji Okazaki and Takafumi Korenaga
Comment: Ronald I. McKinnon
Comment: Shinji Takagi
13. The Syndrome of the Ever-Higher Yen, 1971-1995: American Mercantile Pressure on Japanese Monetary Policy
Ronald I. McKinnon, Kenichi Ohno, and Kazuko Shirono
Comment: Kazuo Ueda
14. Testing for the Fundamental Determinants of the Long-Run Real Exchange Rate: The Case of Taiwan
Hsiu-Ling Wu
Comment: Chi-Wa Yuen
Comment: Ponciano S. Intal, Jr.
15. Hong Kong’s Currency Board and Changing Monetary Regimes
Yum K. Kwan and Francis T. Lui
Comment: Barry Eichengreen
Comment: Zhaoyong Zhang
Author Index
Subject Index

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