Exchange arrangements and speculative attacks: Is there a link?

Abstract. The purpose of this article is to empirically investigate which exchange rate arrangements are associated with more speculative attacks in the foreign exchange market, a relationship which is estimated using a least squares dummy variables panel data model. Also, this article addresses the issue of measurement errors in the classification of exchange rate regimes by using four different classification schemes. Three de facto and one de jure classifications are used. Consequently, the sensitivity of these results to alternative exchange rate classifications is also tested. The empirical findings indicate clear support for fixed regimes particularly in emerging and developing countries.Keywords. Exchange rate regimes, speculative attacks, currency crises.JEL. F31, F33