The Impact of Pegged and Floating Exchange Rate Regimes on Macro Economic Performance

The choice of appropriate exchange rate regime for a country has been a perennial question in international economics, be it in academia or policy circles. The past one decade has seen various research recommendations for appropriate exchange rate regime choice. Each of these recommendations has on one time or the other resulted in unintended economic consequences.

This paper intends to determine whether developing countries are more likely to benefit more from pegged or floating exchange rate regime, by studying two groups of developing countries, one applying fixed exchanged rate regime, and the other applying floating exchanged rate regime.