The Politics of Exchange Rates in Developing Countries

Political Cycles and Domestic Institutions

  • Ralph Setzer

Part of the Contributions to Economics book series (CE)

About this book


This book considers the issue of exchange rate policymaking from a political economy perspective. It illustrates both theoretically and empirically how domestic political and institutional incentives shape exchange rate policies in developing countries. Modelling policymakers’ preferences as endogenous, the book answers questions as the following: What influences the relative value that a country puts on fixed versus floating regimes? Why do governments, during certain episodes, deviate from an officially announced exchange rate regime? How do policymakers’ exchange rate preferences change during election periods? The empirical analysis is based on a panel survey of 47 countries and thereby provides insights on how political and institutional conditions typically affect exchange rate policy.


Developing Countries Duration Data Analysis Emerging Market Economies Exchange Rate Regime Political Economy

Authors and affiliations

  • Ralph Setzer
    • 1
  1. 1.Deutsche BundesbankFrankfurtGermany

Bibliographic information

  • DOI
  • Copyright Information Physica-Verlag Heidelberg 2006
  • Publisher Name Physica-Verlag HD
  • eBook Packages Business and Economics
  • Print ISBN 978-3-7908-1715-7
  • Online ISBN 978-3-7908-1716-4
  • Series Print ISSN 1431-1933
  • Buy this book on publisher's site