Econometric Analysis of Discrete Reforms

Author/Editor:

Alexei P Kireyev

Publication Date:

October 1, 2001

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper suggests an econometric methodology for testing the effectiveness of reforms implemented in one major step, i.e., discrete reforms. The methodology is based on the exogeneity properties of variables in an econometric model. The paper specifies the preconditions for setting up an appropriate model; suggests an economic interpretation of the tests for weak, strong, and superexogeneity; and illustrates this methodology by applying it to two cases of instantaneous reforms. The exogeneity properties of variables in a correctly specified econometric model may help uncover information on the preparation, implementation, and the outcome of such reforms, which could be useful for future policy advice.

Series:

Working Paper No. 2001/156

Subject:

Econometric analysis Econometric models Exchange rate arrangements Exchange rate unification Exchange rates Foreign exchange

English

Publication Date:

October 1, 2001

ISBN/ISSN:

9781451857405/1018-5941

Stock No:

WPIEA1562001

Pages:

38

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