Exchange rates regime and anchor-peg theory: estimation models and econometric problems on the Chinese basket peg
Abstract
This work aimed to analyze the problem of exchange rate regimes of the backet-peg type. After the end of the Bretton Woods system, the exchange rate regime was almost flexible by international convention. However, to ensure price stability and cool down the economy, developing countries have implemented exchange rate regimes anchored to international currencies. As a result, they used a dollar-peg regime, since the dollar is a currency that rises to the role of international currency. The abandonment of this system has led some countries to implement a basket-peg regime. Therefore, we tried to analyze the Chinese exchange rate regime after criticism of the estimation models. In the end, we concluded that it is still anchored to the US dollar.
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