02160cam a22002657 4500001000600000003000500006005001700011008004100028100002400069245008700093260006600180490004100246500001900287520103600306530006101342538007201403538003601475690006601511690010201577700002401679710004201703830007601745856003701821856003601858w7993NBER20151006005306.0151006s2000 mau||||fs|||| 000 0 eng d1 aCalvo, Guillermo A.10aFear of Floatingh[electronic resource] /cGuillermo A. Calvo, Carmen M. Reinhart. aCambridge, Mass.bNational Bureau of Economic Researchc2000.1 aNBER working paper seriesvno. w7993 aNovember 2000.3 aIn recent years, many countries have suffered severe financial crises, producing a staggering toll on their economies, particularly in emerging markets. One view blames fixed exchange rates-- soft pegs'--for these meltdowns. Adherents to that view advise countries to allow their currency to float. We analyze the behavior of exchange rates, reserves, the monetary aggregates, interest rates, and commodity prices across 154 exchange rate arrangements to assess whether official labels' provide an adequate representation of actual country practice. We find that, countries that say they allow their exchange rate to float mostly do not--there seems to be an epidemic case of fear of floating.' Since countries that are classified as having a free or a managed float mostly resemble noncredible pegs--the so-called demise of fixed exchange rates' is a myth--the fear of floating is pervasive, even among some of the developed countries. We present an analytical framework that helps to understand why there is fear of floating. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aF31 - Foreign Exchange2Journal of Economic Literature class. 7aF33 - International Monetary Arrangements and Institutions2Journal of Economic Literature class.1 aReinhart, Carmen M.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w7993.4 uhttp://www.nber.org/papers/w799341uhttp://dx.doi.org/10.3386/w7993