1. Andrew K Rose Berkeley-Haas, ABFER, CEPR and NBER
Discussion of “Pegxit: Evidence from the Classical Gold Standard” by Mitchener and Pina
Andrew K Rose
Berkeley-Haas, ABFER, CEPR and NBER

2. Pegxit Discussion, Andrew Rose
Cool Idea!
A very natural shock to examine causes of monetary policy switches
New!
Much work in the past on monetary, fiscal, and financial causes
Relatively little that’s real in literature
Also, no hint of multiplicity in equilibria
Works in theory
Seems to work in practice too
Pegxit Discussion, Andrew Rose

3. Pegxit Discussion, Andrew Rose
Doubts
So obvious … how could we have missed this?
Many fluctuations in terms of trade for EMs/LDCs … have we ignored them?
Many fluctuations in price of oil, yet oil exporters are resolute ($) peggers
Perhaps room for suspicion … or at least more work
Why do MP restrict themselves to gold standard?
Analysis often quite indirect e.g., (10)
Why use CRS instead of simple binary variable for regime switch?
Why not regress on aggregate export prices or terms of trade in (13)?
Pegxit Discussion, Andrew Rose

4. Pegxit Discussion, Andrew Rose
Extension to Post-War
Data
Annual Penn World Table 9.0 for 173 countries,
Price exports, price imports, terms of trade
Reinhart-Rogoff “Natural” Exchange Rate Regimes
Exits from Hard Peg
Exits from Soft Peg
Exits from Any Peg
Methodology
Standard event-study
Pegxit Discussion, Andrew Rose

5. Pegxit Discussion, Andrew Rose
Unfortunately …
Pegxit Discussion, Andrew Rose

6. Pegxit Discussion, Andrew Rose
Summary
Thought-Provoking .. perhaps to excess …
Seems natural, works in theory (somewhat contrived)
Unfortunately doesn’t work that well in the data
Especially unconvincing post-war
Pegxit Discussion, Andrew Rose

7. Remaining Questions (mostly nit-picking)
Are MP results peculiar to GS?
Couldn’t one think of a better cost of floating (trade lower outside fix, reducing government revenue …)?
Does trade vary that much by exchange rate regime?
Strong links between exchange rate regime and government revenue?
Figure 1 is poor motivation: currency risk is volatile, prices aren’t (!)
Ditto Figure 3
Table 1: ineffective summary
Table 3: few peripheral countries (and those have low means!)
Pegxit Discussion, Andrew Rose