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LUND UNIVERSITY LIBRARIES

Exchange Rate Regimes and Economic Crises: A Panel Study of Norway and Denmark (2000-2023)

Svensson, Mathea LU (2025) NEKH02 20251
Department of Economics
Abstract
This thesis explores the role of exchange rate regimes in shaping the economic
effects of crises and subsequent recovery, using Norway and Denmark as case studies over
the period 2000 to 2023. Norway operates under a floating regime, whereas Denmark has a
fixed exchange rate tied to the euro. The hypothesis is that countries with floating exchange
rates may benefit during crises, as the Mundell-Fleming theory suggests that they have the
ability to use monetary policy as a stabilizing tool during financial disturbances and periods
of economic downturn. A fixed-effects panel regression model was conducted to compare
economic performance, measured by GDP per capita growth, across three crises: the dotcom
bubble, the global financial... (More)
This thesis explores the role of exchange rate regimes in shaping the economic
effects of crises and subsequent recovery, using Norway and Denmark as case studies over
the period 2000 to 2023. Norway operates under a floating regime, whereas Denmark has a
fixed exchange rate tied to the euro. The hypothesis is that countries with floating exchange
rates may benefit during crises, as the Mundell-Fleming theory suggests that they have the
ability to use monetary policy as a stabilizing tool during financial disturbances and periods
of economic downturn. A fixed-effects panel regression model was conducted to compare
economic performance, measured by GDP per capita growth, across three crises: the dotcom
bubble, the global financial crisis, and the COVID-19 pandemic. The results show that
Norway experienced higher growth than Denmark during crisis years. The findings for the
recovery periods were less conclusive, but indicate that Denmark saw stronger post-crisis
growth. The study concludes that exchange rate regimes likely influence how countries
respond to crises, though no regime appears universally better. Further research with broader
datasets is recommended to draw more general conclusions. (Less)
Please use this url to cite or link to this publication:
author
Svensson, Mathea LU
supervisor
organization
course
NEKH02 20251
year
type
M2 - Bachelor Degree
subject
keywords
Exchange rate regimes, Economic crises, Monetary policy, Mundell-Fleming trilemma, Panel data regression
language
English
id
9208883
date added to LUP
2025-09-12 09:16:25
date last changed
2025-09-12 09:16:25
@misc{9208883,
  abstract     = {{This thesis explores the role of exchange rate regimes in shaping the economic
effects of crises and subsequent recovery, using Norway and Denmark as case studies over
the period 2000 to 2023. Norway operates under a floating regime, whereas Denmark has a
fixed exchange rate tied to the euro. The hypothesis is that countries with floating exchange
rates may benefit during crises, as the Mundell-Fleming theory suggests that they have the
ability to use monetary policy as a stabilizing tool during financial disturbances and periods
of economic downturn. A fixed-effects panel regression model was conducted to compare
economic performance, measured by GDP per capita growth, across three crises: the dotcom
bubble, the global financial crisis, and the COVID-19 pandemic. The results show that
Norway experienced higher growth than Denmark during crisis years. The findings for the
recovery periods were less conclusive, but indicate that Denmark saw stronger post-crisis
growth. The study concludes that exchange rate regimes likely influence how countries
respond to crises, though no regime appears universally better. Further research with broader
datasets is recommended to draw more general conclusions.}},
  author       = {{Svensson, Mathea}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Exchange Rate Regimes and Economic Crises: A Panel Study of Norway and Denmark (2000-2023)}},
  year         = {{2025}},
}