01978cas a2200265 a 4500 AALejournalIMF023155 230101c9999 xx r poo 0 0eng d 20.00 USD 9781498359245 1018-5941 BD-DhAAL BD-DhAAL Ghosh, Atish. Friedman Redux : External Adjustment and Exchange Rate Flexibility / Atish Ghosh, Mahvash Qureshi, Charalambos Tsangarides. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (43 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Milton Friedman argued that flexible exchange rates would facilitate external adjustment. Recent studies find surprisingly little robust evidence that they do. We argue that this is because they use composite (or aggregate) exchange rate regime classifications, which often mask very heterogeneous bilateral relationships between countries. Constructing a novel dataset of bilateral exchange rate regimes that differentiates by the degree of exchange rate flexibility, as well as by direct and indirect exchange rate relationships, for 181 countries over 1980-2011, we find a significant and empirically robust relationship between exchange rate flexibility and the speed of external adjustment. Our results are supported by several "natural experiments" of exogenous changes in bilateral exchange rate regimes. Mode of access: Internet Qureshi, Mahvash. Tsangarides, Charalambos. IMF Working Papers; Working Paper ; No. 2014/146 Full text available on IMF https://elibrary.imf.org/openurl?genre=journal&issn=1018-5941&volume=2014&issue=146 IMF e-Library