Exchange Rate Targets and Currency Bands
Title | Exchange Rate Targets and Currency Bands PDF eBook |
Author | Paul Krugman |
Publisher | Cambridge University Press |
Pages | 274 |
Release | 1992-10-22 |
Genre | Business & Economics |
ISBN | 9780521435260 |
This volume examines the intersection between a new analytical approach and a real economic problem.
Currency Bands, Target Zones, and Cash Limits
Title | Currency Bands, Target Zones, and Cash Limits PDF eBook |
Author | Mr.Marcus Miller |
Publisher | International Monetary Fund |
Pages | 42 |
Release | 1990-02-01 |
Genre | Business & Economics |
ISBN | 1451928858 |
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. Results are compared to those which emerge from a simple monetary model subject to velocity shocks. The effects of a realignment of the Band, and of fiscal policy used in conjunction with monetary policy to defend the band, are also examined.
Perforate and Imperforate Currency Bands
Title | Perforate and Imperforate Currency Bands PDF eBook |
Author | Paolo A. Pesenti |
Publisher | |
Pages | 48 |
Release | 1990 |
Genre | Foreign exchange administration |
ISBN |
Soft Exchange Rate Bands and Speculative Attacks
Title | Soft Exchange Rate Bands and Speculative Attacks PDF eBook |
Author | Mr.Alessandro Prati |
Publisher | International Monetary Fund |
Pages | 30 |
Release | 1998-11-01 |
Genre | Business & Economics |
ISBN | 1451857373 |
We present a model of a “soft” exchange rate target zone and interpret it as a stylized description of the post-August 1993 ERM. Our central bank targets a moving average of the current and past exchange rates, rather than the exchange rate’s current level, thus allowing the rate to move within wide margins in the short run, but within narrow margins in the long run. For realistic parameters, soft target zones are significantly less vulnerable to speculative attacks than “hard” target zones. These predictions are consistent with the ERM’s experience and the abatement of speculative pressure in European markets since the bands’ widening in 1993.
Currency Option Pricing in Credible Target Zones
Title | Currency Option Pricing in Credible Target Zones PDF eBook |
Author | Bernard Dumas |
Publisher | |
Pages | 32 |
Release | 1993 |
Genre | Currency convertibility |
ISBN |
This paper develops a model for valuing options on a currency which is maintained within a band. The starting point of our model is the well known Krugman model for exchange-rate behavior within a target zone. Results from model runs provide insight into evidence reported by other authors of mispricing of currency options by extensions of the Black-Scholes model.
Modeling and Estimating Currency Bands in a Managed Floating System
Title | Modeling and Estimating Currency Bands in a Managed Floating System PDF eBook |
Author | Renqi Zhang |
Publisher | |
Pages | 32 |
Release | 1994 |
Genre | Foreign exchange |
ISBN |
The Crawling Band as an Exchange Rate Regime
Title | The Crawling Band as an Exchange Rate Regime PDF eBook |
Author | John Williamson |
Publisher | Peterson Institute |
Pages | 204 |
Release | 1996 |
Genre | Business & Economics |
ISBN | 9780881322316 |
This study examines in detail the experiences of three countries that have in recent years operated exchange rate systems of "crawling bands," similar in spirit to the target zones that the author has recommended in the past. Williamson compares the succcessful experiences of 3 countries that have operated crawling bands with 15 similar countries and concludes that the crawling band exchange-rate policy has been an important element in their success. The study includes a manual for managing crawling bands.