Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper develops a new methodology to infer the de facto exchange rate regime, based on a structural VAR model with sign restrictions. The methodology is applied to data from eleven emerging markets that experienced a currency crisis. The main findings are as follows: (i) to be consistent with the hollow middle hypothesis, many countries moved toward hard pegs, such as dollarization and a currency board, or more flexible exchange rate arrangements that are close to the free float in the post-crisis period; and (ii) the cases where a country overstates its exchange rate flexibility (including the case of fear of floating) are found in all samples, but such cases tend to be less frequently found in the post-crisis period than in the pre-crisis period.