How do countries choose their monetary policy frameworks?

David Cobham, Mengdi Song

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)
24 Downloads (Pure)


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.

Original languageEnglish
Pages (from-to)1187-1207
Number of pages21
JournalJournal of Policy Modeling
Issue number6
Early online date25 Jun 2020
Publication statusPublished - Nov 2020


  • Discretion
  • Exchange rate targets
  • Financial market depth
  • Inflation targets
  • Monetary policy frameworks
  • Trade networks

ASJC Scopus subject areas

  • Economics and Econometrics


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