This paper investigates the determinants of countries’ choices of monetary policy framework. A brief narrative focused on groupings of countries motivates an econometric analysis which draws on previous work on the determinants of exchange rate regimes, bringing in standard factors as well as the trade networks of potential anchor currency blocs and the financial market depth that are emphasised in the narrative. The model turns out to be able to predict three quarters of countries’ choices, and there is no obvious systematic pattern in the errors. The results have important implications for how countries should choose their monetary policy frameworks.
|Number of pages||21|
|Journal||Journal of Policy Modeling|
|Early online date||25 Jun 2020|
|Publication status||Published - Nov 2020|
- Exchange rate targets
- Financial market depth
- Inflation targets
- Monetary policy frameworks
- Trade networks
ASJC Scopus subject areas
- Economics and Econometrics
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- School of Social Sciences, Edinburgh Business School - Professor
- School of Social Sciences - Professor
Person: Academic (Research & Teaching)