Essays on exchange rate policies and monetary integration.

Summary This thesis studies the choice of exchange rate regimes in particular economic contexts. The first part (Chapters 1 and 2) considers the case of small countries whose debts are denominated in foreign currencies and the case of a region made up of such small countries when there is a similarity in the composition of the baskets defining their effective exchange rates. The second part of the thesis (Chapters 3 and 4) focuses on the consideration of different exchange rate regimes in the monetary context of liquidity traps compared to a traditional monetary environment. Based on DSGE theoretical modeling, Bayesian econometrics and panel data, the thesis mainly uses the analysis of response functions, welfare functions and monetary misalignments as criteria for comparing several alternative monetary regimes. The main findings of this thesis can be summarized as follows. The flexible exchange rate appears to be the best regime for small open economies such as those in Southeast Asia. At the regional level, it is shown that effective targeting leads to stability in the region's bilateral exchange rates, a kind of exchange rate fixity that would resemble a de facto currency area. In the monetary context of liquidity traps, it is found that, contrary to the common belief during the eurozone crisis, monetary union is more effective than national flexible exchange rate policies. Only an intervention on the nominal exchange rate could allow the independent exchange rate regime to dominate the monetary union. Through a theoretical and empirical analysis of the effect of the liquidity trap on the magnitude of monetary misalignments, it is also shown that the ZLB constraint tends to reduce monetary misalignment in a currency union compared to national floating policies.This argues for strengthening monetary integration within a union during the liquidity trap period.