Currency Bands, Target Zones, and Price Flexibility

Marcus Miller; Paul Weller

doi:10.2307/3867040

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Journal article

Currency Bands, Target Zones, and Price Flexibility

Marcus Miller and Paul Weller

Staff papers - International Monetary Fund, Vol.38(1), pp.184-215

03/01/1991

DOI: 10.2307/3867040

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Abstract

Exchange rate behavior is analyzed in the context of a stochastic rational expectations model in which there are random shocks to the price-setting mechanism and in which the authorities choose to impose either nominal or real exchange rate bands. The effects of rules for realignment of the band are also examined. Results are compared with those that emerge from a simple monetary model subject to velocity shocks.

Currency

Stochastic Models

Arbitrage

Boundary conditions

Exchange rates

Interest rates

Money supply

Price flexibility

Price shocks

Real exchange rates

Details

Title: Subtitle: Currency Bands, Target Zones, and Price Flexibility
Creators: Marcus Miller - International Monetary Fund
Paul Weller
Resource Type: Journal article
Publication Details: Staff papers - International Monetary Fund, Vol.38(1), pp.184-215
DOI: 10.2307/3867040
ISSN: 0020-8027
eISSN: 1564-5150
Publisher: International Monetary Fund
Number of pages: 32
Language: English
Date published: 03/01/1991
Academic Unit: Finance
Record Identifier: 9984963431402771

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