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Surprising Similarities:
Recent Monetary Regimes
of Small Economies
Andrew K. Rose
Berkeley-Haas, CEPR and NBER
Key Question
• Global Financial Crisis (GFC) spread globally,
especially via capital (and trade) flows
• How did outcomes for small economies vary
by monetary regime?
– Did one monetary regime provide more insulation
from GFC spillovers?
Rose: Monetary Regime Similarities
2
Focus
1. Recent Period
– Panel of data, mostly focusing on period of and
since GFC (2007-2012)
2. Small Countries
– Who’s Small? The non-large (>170 countries)
• Exclude the IMF Systemic-5
• China, EMU, Japan, UK, USA
Rose: Monetary Regime Similarities
3
Key Finding 1
• Monetary regimes of small economies have
been stable recently
• Unexpected because:
– Historical counter-cyclicality
– Size of GFC and Great Recession
• Why the Stability? What’s New?
– Countries that Float with Inflation Targeting
– (Hard Fixes always around)
Rose: Monetary Regime Similarities
4
Key Finding 2
• Remarkably Similar Recent Outcomes for Hard
Fixers and Inflation Targeters
– Business Cycles, Inflation, Capital Flows,
Responses to Capital Flows …
• Implausible or Boring?
– Surprising since these appear to be two very
different monetary regimes
– Banal for literature (since Baxter-Stockman), since
regimes matter for little except exchange rate
Rose: Monetary Regime Similarities
5
Data Set
• Annual Panel
• Standard sources (WDI, Polity IV, EFW, IFS,
BIS)
Rose: Monetary Regime Similarities
6
Measuring the Monetary Regime
1. Issue: de jure or de facto?
2. Issue: exchange rate or monetary regime?
3. Issue: want recent span
• Solution: de facto monetary regimes from IMF
Annual Report on Exchange Arrangements and
Exchange Restrictions (AREAER)
– Potential problem: short span (2001-2012)
Rose: Monetary Regime Similarities
7
de facto Alternatives
• Levy-Yeyati and Sturzenegger
– Exchange rate regimes through 2004
• Reinhart and Rogoff
– Exchange rate regimes through 2010
• Stone and Bhundia
– Monetary Regimes 1990-2005
Rose: Monetary Regime Similarities
8
Monetary Regimes of the Small
• AREAER: country-years split into 44 cells
– Depends on
• Degree of exchange rate rigidity
• orientation of fix (if any)
• objective of float (inflation, money aggregate, ‘other’)
• My focus: two extreme monetary regimes
– Floating with Inflation Target
• AREAER criteria deliver similar results to Mishkin’s 5
– Hard Fix
Rose: Monetary Regime Similarities
9
2006 Monetary Regimes for Small
• 26 float with inflation target
– 1 left by 2012 (Slovakia for EMU)
• 83 hard fix
– No separate legal tender; currency board;
conventional peg
• (Conv. Peg: Bahamas, Denmark, Latvia, Saudi Arabia,
Benin, Namibia …)
• (Insensitive to inclusion: appendix)
– 23 left by 2012
Rose: Monetary Regime Similarities
10
Inflation Targeters
Continuously 2006-12
Armenia
Australia
Brazil
Canada
Chile
Colombia
Czech Republic
Guatemala
Hungary
Iceland
Indonesia
Israel
Korea, Rep.
Mexico
New Zealand
Norway
Peru
Philippines
Poland
Romania
South Africa
Sweden
Switzerland
Thailand
Turkey
Rose: Monetary Regime Similarities
11
Inflation Targeter in 2006,
Exited by 2012
Slovakia
(Joined Euro)
Rose: Monetary Regime Similarities
12
Hard Fixers
Continuously 2006-12
Antigua & Barb. Aruba
Bahamas
Bahrain
Barbados
Belize
Benin
Bhutan
Bosnia & Herz.
Brunei
Bulgaria
Burkina Faso
Cameroon
Cape Verde
Cen. Afr. Rep.
Chad
Comoros
Congo, Rep.
Cote d'Ivoire
Denmark
Djibouti
Dominica
Ecuador
El Salvador
Eq. Guinea
Eritrea
Fiji
Gabon
Grenada
Guinea-Bissau
Hong Kong
Jordan
Kiribati
Latvia
Lesotho
Libya
Lithuania
Mali
Marshall Islands Micronesia
Montenegro
Morocco
Namibia
Nepal
Niger
Oman
Palau
Panama
Qatar
Samoa
San Marino
Saudi Arabia
Senegal
St. Kitts & Nevis St. Lucia
Timor-Leste
Togo
St. Vinc. &Gren. Swaziland
Rose: Monetary Regime Similarities
Unit Arab Emir.
13
Hard Fixers in 2006,
Exited by 2012
Azerbaijan
(Float, Other)
Mauritania
(Float, Other)
Belarus
(Float, Other)
Pakistan
(Float, Mon Targ)
Cyprus
(Euro)
Seychelles
(Float, Mon Targ)
Egypt
(Float, Other)
Slovenia
(Euro)
Estonia
(Euro)
Solomon Islands
(Float, Other)
Honduras
(Soft Fix)
Syria
(Soft Fix)
Lebanon
(Soft Fix)
Trinidad & Tobago
(Soft Fix)
Macedonia
(Soft Fix)
Ukraine
(Float, Mon Targ)
Maldives
(Soft Fix)
Vanuatu
(Soft Fix)
Malta
(Euro)
Vietnam
(Soft Fix)
Rose: Monetary Regime Similarities
14
Hard Fixers in 2006 and 2012
but not continuously in between
Kuwait
Turkmenistan
Venezuela
Rose: Monetary Regime Similarities
15
“Sloppy Center” Remaining
• Soft fixes (stabilized, crawling peg/band,
pegged exchange rate within horizontal
bounds);
• Floating with a monetary target (variants
including crawl-like, managed, or free floats)
• Floating ‘Other’
• 32 in 2006-2012 (17 with AREAER switches)
– 30 switched out by 2012
Rose: Monetary Regime Similarities
16
Sloppy Center
Continuously 2006-12
(* indicates switched IMF de facto Monetary regime)
Afghanistan
Algeria*
Botswana
Burundi*
Cambodia*
Congo, D. Rep.* Costa Rica*
Gambia, The
Guinea*
Haiti*
India
Iraq*
Jamaica*
Kenya
Kyrgyzstan*
Lao PDR*
Liberia*
Madagascar
Malaysia
Mauritius*
Mozambique
Myanmar*
Nicaragua
Pap. N Guinea* Paraguay*
Singapore*
Somalia
Sudan*
Tanzania
Uganda
Zambia
Rose: Monetary Regime Similarities
Tonga
17
Sloppy Center in 2006,
Exited by 2012
Albania
(Inflat. Target)
S Tome & Prin
(Hard Fix)
Dom Repub.
(Inflat. Target)
Serbia
(Inflat. Target)
Georgia
(Inflat. Target)
Uruguay
(Inflat. Target)
Ghana
(Inflat. Target)
Zimbabwe
(Hard Fix)
Moldova
(Inflat. Target)
Rose: Monetary Regime Similarities
18
Sloppy Center in 2006 and 2012
but not continuously in between
Angola
Argentina
Bangladesh
Bolivia
Croatia
Ethiopia
Guyana
Iran
Kazakhstan
Malawi
Mongolia
Nigeria
Russia
Rwanda
Sierra Leone
Sri Lanka
Suriname
Tajikistan
Tunisia
Uzbekistan
Yemen
Rose: Monetary Regime Similarities
19
Durability of Monetary Regimes
Small Economies
--- Monetary Regime in 2006 --2012 Mon. Regime
Inflat. Targeting (26)
Hard Fix (83)
Sloppy Center (62)
Inflation Targeting
25
0
7
Hard Fix
0
63
2
Sloppy Center
0
16
53
EMU Entrants
1
4
0
96%
72%
23%
20%
4%
7%
% continuously in
regime since 2006
% 2011 Global GDP
Rose: Monetary Regime Similarities
20
Sloppy Center: Turnover is
Big and (Counter-) Cyclic
Global Real
GDP Growth
2002
# Shifts in IMF De Facto
Monetary Regime
27
2003
8
3.7
2004
7
5.0
2005
9
4.6
2006
7
5.3
2007
11
5.4
2008
28
2.8
2009
37
-0.6
2010
7
5.2
2011
21
4.0
2012
8
3.2
Rose: Monetary Regime Similarities
2.9
21
Representative?
• Since 1970, regime turnover has been high
and (counter-) cyclic
Rose: Monetary Regime Similarities
22
Durability of Monetary Regimes , Small
Economies: Historical Volatility
(excludes Germany, Japan, UK, USA)
% Continuously in same:
All Countries
Fixers
Reinhart-Rogoff regime,
1970-76
(% 1976 Global GDP)
55%
59%
12.3%
6.4%
60 %
75%
28.4%
3.3%
53 %
58 %
9.1%
9.1%
Reinhart-Rogoff regime,
1980-86
(% 1986 Global GDP)
Levy-Yeyati-Sturzenegger
regime, 1980-86
(% 1986 Global GDP)
Rose: Monetary Regime Similarities
23
Historical Cyclicality of
Monetary/Exchange Rate Regimes
Business Cycle
Measure:
Stone-Bhundia
(1990-2005)
Levy-Yey.-Sturzen.
(1974-2004)
Reinhart- Rogoff
(1970-2006)
GDP:
HP
-14.9**
(4.0)
-1.6
(1.2)
-1.7
(1.1)
GDP:
BK
-16.7**
(4.2)
-2.0
(1.2)
-1.9
(1.1)
GDP:
CF
-12.9**
(4.0)
-2.1
(1.2)
-2.0
(1.1)
GDP:
Growth
-.04
(.02)
-.01
(.01)
-.003
(.007)
Rose: Monetary Regime Similarities
GDP:
Linear
-5.3**
(1.7)
-1.4**
(.4)
-1.1**
(.4)
Unemp.
Rate
.13*
(.05)
.04
(.03)
.07*
(.03)
24
Conclude: Stability from
Inflation Targeting Regimes
• New
• Significant
• Acyclic
Rose: Monetary Regime Similarities
25
Monetary Regimes by the Numbers:
Counting Countries
Grouping Small Economies by Monetary Regime
6
Large Economies excluded: China, EMU, Japan, UK, and US
150
Inf. Target Float
4
2
Global Growth
100
0
50
Hard Fixers
-2
Global Growth
0
Number of Economies
Sloppy Center
2001
2007
Rose: Monetary Regime Similarities
2012
26
Monetary Regimes by the Numbers:
Sizing Up the Economies
Global GDP of Small Economies by Monetary Regime
.4
6
Large Economies excluded: China, EMU, Japan, UK, and US
Sloppy Center
2
Global Growth
0
-2
Hard Fixers
2001
0
.2
Global Growth
4
Inf. Target Float
2007
Rose: Monetary Regime Similarities
2012
27
Tangent: Determinants of
Monetary Regimes
• Remarkably little known
– Recent surveys in Klein and Shambaugh (2010),
Rose (2011)
• Literature: focus on (sluggish) levels
• Here: use Stone-Bhundia regimes (through
2005, pre-dates GFC)
– Size, income, institutions, openness
Rose: Monetary Regime Similarities
28
Characteristics Across Monetary
Regimes: Univariate Evidence
Averages:
Sloppy Center
Hard Fix
Inflation Target
Log Population
16.5
15.5
16.6
Hard Fix =
Inflation
Target (t-test)
-8.3**
Log R GDP p/c
8.9
9.4
9.7
-4.6**
Polity
5.7
3.1
9.4
-10.1**
Trade %GDP
84.5
88.8
68.7
5.0**
.4
.7
1.3
-4.3**
Inv Free, EFW
59.8
57.4
66.4
-5.2**
Fin Free, EFW
52.9
57.5
66.5
-4.8**
M2 %GDP
52.6
59.9
67.3
-2.1*
Credit %GDP
198.8
186.5
90.9
1.0
Chinn-Ito
Rose: Monetary Regime Similarities
29
Quantile Plots
• Compare (univariate) distribution of key
characteristics across regimes
• Quantiles for different regimes plotted on
different axes
• Similar distributions: data plotted along
diagonal
Rose: Monetary Regime Similarities
30
Quantile Plots for Small Economies, 2011
10 12 14 16 18 20
7
8
9
Hard Fixers
10 11
Log Population
6
Hard Fixers
Log Real GDP p/c
7
8
9
10
Inflation Targeters
11
10
Hard Fixers
5
0
-5
16
18
Inflation Targeters
20
0
-10
Hard Fixers
14
Trade, %GDP
100 200 300 400
Polity
12
5
6
7
8
Inflation Targeters
9
10
0
Rose: Monetary Regime Similarities
50
100
150
Inflation Targeters
200
31
Determinants of Monetary Regimes :
Multivariate Evidence
Pop=0
.00**
.00**
.00**
.00**
.00**
.00**
.06
.03*
.14**
.29
.05*
.03*
.00**
.00**
.00**
.00**
.00**
.00**
Trade=0
.24
.27
.22
.38
.25
Fin
Open=0
Open=0
.56
.37
.28
.75
.20
.37
.34
.34
.59
.15
Income=0
Polity=0
Fix=IT
.00**
.02*
.00**
.00**
.00**
.01*
Obs
1108
1043
713
713
998
1074
.18
.20
.25
.25
.25
.19
Pseudo R2
Rose: Monetary Regime Similarities
32
Hard to extend Univariate Success
• Multinomial Logit compares determinants of
three regimes
Rose: Monetary Regime Similarities
33
Determinants of Monetary Regimes :
Coefficient Estimates
Hard Fix (versus Sloppy Center)
Log
Population
Log Real
GDP p/c
Polity
-.33*
-.50**
-.58**
(.14)
(.16)
(.18)
.52
.68*
.33
(.34)
(.32)
(.36)
-.07*
-.09**
-.07
(.04)
(.03)
(.04)
Inflation Target Float (versus Sloppy Center)
-.53**
(.19)
.33
(.36)
-.09*
(.04)
-.60**
(.17)
.30
(.32)
-.10**
(.03)
-.48**
(.16)
.59
(.32)
-.09**
(.03)
Log
Population
Log Real
GDP p/c
Polity
.87**
(.30)
.63
(.41)
.95**
(.27)
.77*
(.36)
.96*
(.39)
.88**
(.30)
.51
(.33)
.95**
(.37)
.66**
(.22)
.60*
(.26)
.86*
(.37)
.67**
(.22)
.50
(.33)
.79*
(.35)
.63**
(.22)
.92**
(.33)
.75*
(.38)
.98**
(.29)
Rose: Monetary Regime Similarities
34
Limited Success, No Surprises
• Small countries: more likely to (hard-) fix, less
likely to target inflation
• Democracies: less likely to fix, more likely to
target inflation
• Marginal effects of income
• No effect of real or financial openness
• Fit consistently poor!
– Always hard to determine monetary regime
Rose: Monetary Regime Similarities
35
Consequences of Monetary
Regime
• Initially take regime choice as
exogenous/random
– Not so bad in practice
– Will verify with IV/matching: results insensitive
Rose: Monetary Regime Similarities
36
Compare Three Regimes
• Inflation Targeting Floats
– Ex: Brazil, Korea, Mexico, Canada
• Hard Fixes
– 60 durable (Saudi Arabia, Hong Kong, Denmark)
• Sloppy Center
– India, Russia, Iran
Rose: Monetary Regime Similarities
37
Compare long-lived, durable
regimes (IT/HF)
1. With sloppy center
2. With each other
• Throughout use period since 2006
Rose: Monetary Regime Similarities
38
Quantile Plots: Outcomes for Hard
Fixers Similar to Inflation Targeters
• Unexpected a priori: two dis-similar monetary
regimes
• But univariate distributions surprisingly alike,
much overlap
Rose: Monetary Regime Similarities
39
Quantile Plots for Small Economies, 2007-2012
0
10
Hard Fixers
20
50
-10
-50
0
Hard Fixers
CPI Inflation
30
Demeaned Real GDP Growth
-40
-20
0
Inflation Targeters
20
0
-10
0
Inflation Targeters
10
0
20
-20 -10
-20
20
10 20 30
Hard Fixers
0
Hard Fixers
-50
-30
10
15
Inflation Targeters
Government Budget, %GDP
50
Current Account, %GDP
5
-10
Timor-Leste dropped
Rose: Monetary Regime Similarities
0
10
Inflation Targeters
20
40
Quantile Plots for Small Economies, 2007-2012
20
0
-80 -60 -40 -20
0
Hard Fixers
20 40 60 80
Capital Outflows, %GDP
-20
Hard Fixers
Capital Inflows, %GDP
-20
0
20
40
Inflation Targeters
60
-40
20
4
6
International Reserve Growth
2
-2
0
0
Hard Fixers
10 20
-30 -20 -10
Hard Fixers
Net Capital Flows, %GDP
-20
0
Inflation Targeters
-20
-10
0
10
Inflation Targeters
20
-.5
Rose: Monetary Regime Similarities
0
.5
1
Inflation Targeters
1.5
41
Quantile Plots for Small Economies, 2007-2012
15
0
5
10
Hard Fixers
20
0
-40 -20
Hard Fixers
20
Long Bond Yield
40
Real Eff Exch Rate Change
-20
-10
0
10
Inflation Targeters
20
0
0
15
50
Hard Fixers
200
100
-50
-100
Hard Fixers
5
10
Inflation Targeters
Property Price Change
100
Stock Market Change
0
-100
0
100
Inflation Targeters
200
-50
Rose: Monetary Regime Similarities
0
50
Inflation Targeters
100
42
Ditto Statistical Analysis
• Some differences between hard fixers and
inflation targeters … but more similarities
• Not power: effects of HF/IT on inflation
similar, significantly different from SC
Rose: Monetary Regime Similarities
43
Technical Stuff
• Panel LS on dummies for HF/IT
– Omitted: sloppy center
– Fixed time, random country effects (can’t do fixed)
• Regressands
– Output consequences
– Capital flows
– Adjustment mechanisms
• Current account, capital controls, reserves, money,
fiscal policy, real exchange rate appreciation, inflation
Rose: Monetary Regime Similarities
44
Effects of Monetary Regimes 2007-12:
Regression Evidence on Output
Regressand
BK-Filtered GDP
HP-Filtered GDP
CF-Filtered GDP
Demeaned
Growth
TimeDetrended GDP
Inflation
Targeting
.006
(.004)
-.002
(.001)
-.02
(.02)
-1.9*
(.8)
-.04
(.03)
Hard
Fix
-.003
(.004)
-.004*
(.001)
-.00
(.04)
-1.4
(.8)
-.08**
(.02)
Rose: Monetary Regime Similarities
IT = H Fix?
(P-value)
.04*
IT = H Fix = 0?
(P-value)
.10
.13
.04*
.77
.76
.56
.04*
.16
.01**
45
Effects of Monetary Regimes 2007-12:
Regression Evidence on Capital Flows
Regressand
Gross Capital
Inflows
Gross Capital
Outflows
Net Capital
Flows
Std Dev Capital
Inflows (c/s)
Std Dev Capital
Outflows (c/s)
Inflation
Targeting
3.2
(3.2)
-.0
(3.2)
3.2
(1.9)
5.5
(4.2)
5.1
(4.2)
Hard
Fix
-4.1
(6.4)
-3.2
(6.7)
.8
(1.6)
5.5
(6.9)
7.0
(7.4)
Rose: Monetary Regime Similarities
IT = H Fix?
(P-value)
.90
IT = H Fix = 0?
(P-value)
.57
.61
.87
.03*
.09
1.0
.38
.82
.36
46
Effects of Monetary Regimes 2007-12:
Regression Evidence, Adjustment 1
Regressand
Current
Account
Export
Growth
Import
Growth
Chinn-Ito
Capital Mobility
Fin Freedom
Change
Inv Freedom
Change
Inflation
Targeting
1.6
(1.4)
.01
(.01)
-.00
(.01)
-.1
(.4)
.01
(.01)
.03**
(.01)
Hard
Fix
3.4
(5.5)
.00
(.01)
.00
(.01)
-.5
(.3)
.00
(.01)
.01
(.01)
Rose: Monetary Regime Similarities
IT = H Fix?
(P-value)
.73
IT = H Fix = 0?
(P-value)
.49
.70
.85
.76
.94
.41
.24
.16
.16
.01**
.01**
47
Effects of Monetary Regimes 2007-12:
Regression Evidence, Adjustment 2
Regressand
M2 Growth
(%GDP)
International
Reserve Growth
Government
Budget
Change in
Budget
Inflation
Targeting
-.01
(.01)
-.4
(.4)
.3
(.8)
.5
(.7)
Hard
Fix
.00
(.01)
-.5
(.4)
.7
(.9)
-.4
(.5)
Rose: Monetary Regime Similarities
IT = H Fix?
(P-value)
.18
IT = H Fix = 0?
(P-value)
.41
.26
.44
.70
.74
.30
.57
48
Effects of Monetary Regimes 2007-12:
Regression Evidence, Prices
Regressand
CPI Inflation
GDP Inflation
Real Effective
Exchange Rate
Chg Real Effect
Exchange Rate
Growth in Stock
Prices
Bond Yields
Growth in
Property Prices
Inflation
Targeting
-4.4**
(.7)
-4.7**
(.8)
-15.0
(9.8)
-3.9
(3.4)
-4.5
(3.5)
-1.0
(.8)
2.3
(4.8)
Hard
IT = H Fix?
Fix
(P-value)
-5.2**
.15
(.6)
-5.2**
.41
(.7)
-20.1*
.13
(9.6)
-5.4
.06
(3.5)
-11.8**
.01**
(3.3)
-1.0
.96
(1.0)
-1.1
.35
(5.1)
Rose: Monetary
Regime Similarities
IT = H Fix = 0?
(P-value)
.00**
.00**
.05*
.07
.00**
.43
.63
49
Sensitive to Estimation Technique?
• Use IV (size and polity: determination model)
– Business cycle, investment freedom results
disappear
– Similar results for Inflation (*), stock prices
• Also use nearest-neighbor matching
– Match on government spending (% GDP),
unemployment rate
– Similar results, especially for inflation
Rose: Monetary Regime Similarities
50
Summary
• Strong, Consistent Findings
– Inflation lower (5%) for both hard fixers and
inflation targeters (than SC)
– Net (but not gross) capital flows, change in
investment freedom higher for IT than HF
• Weak, Inconsistent/Marginal Finding
– Worse business cycles, more real depreciation for
both HF and IT (than SC)
– Stock prices declined more for HF than IT
Rose: Monetary Regime Similarities
51
Most Intriguing Result
• Rarely significant difference between effects
of inflation targeting and hard fixes
• Plausible?
– These monetary regimes seem to vary wildly
• Amount of discretion
• Role of exchange rate
Rose: Monetary Regime Similarities
52
Consistent with Literature
• Rey (2013, italics added):
“… analyses suggest monetary conditions are transmitted
from the main financial centre to the rest of the world
through gross credit flows and leverage, irrespective of the
exchange rate regime. This puts the traditional “trilemma”
view of the open economy into question. Fluctuating
exchange rates cannot insulate economies from the global
financial cycle, when capital is mobile.”
– Note: Rey does not actually test relevance of
exchange rate regime
Rose: Monetary Regime Similarities
53
Monetary Regime Matters
Surprisingly Little: An Old Idea
• Klein and Shambaugh (2010), and references
stretching back to …
• Baxter and Stockman (1989):
– “Aside from greater variability of real exchange
rates under flexible than under pegged nominal
exchange-rate systems, we find little evidence of
systematic differences in the behavior of
macroeconomic aggregates or international trade
flows under alternative exchange-rate systems.”
Rose: Monetary Regime Similarities
54
Summary
• Small economies that float with an inflation
target behave similarly to hard fixers over the
post-bubble period
– Artifact of methodology? (used a few)
– Small data set? (>160 countries, 6 volatile years)
– Literature unable to find significant differences
across monetary regimes
• Perhaps there simply are few
Rose: Monetary Regime Similarities
55
Conclusion: 1
• Bulgaria and Romania:
– Small open EMs in EU, reasonable improving
institutions, similar income and size
– Bulgaria in hard fix; Romania floats with IT
• Many other examples
– Denmark and Sweden; Ecuador and Colombia; El
Salvador and Guatemala; Cote d’Ivoire and Ghana;
Bosnia-Herzegovina and Albania
• Similar countries choose different monetary
regimes!
Rose: Monetary Regime Similarities
56
Conclusion: 2
• Differences in monetary regimes can persist
because they’re unimportant
– Growth, output gap, inflation, fiscal policy, current
account, reserve growth … do not vary much with
monetary regime
– So “insulation value” of different monetary
regimes similar in practice
– Consistent with literature if initially counterintuitive (boring more than implausible)
Rose: Monetary Regime Similarities
57
Conclusion: 3
• Small countries now have new stable
alternative to hard fix; float with inflation
target
– Both hard fixers and inflation-targeting floats have
survived GFC and aftermath
• This monetary stability new (compare: 1930s/1970s)
• Since countries in different monetary regimes behave
similarly, can’t easily differentiate between regimes
Rose: Monetary Regime Similarities
58