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Monday, July 27, 2020 | History

4 edition of Soft exchange rate bands and speculative attacks found in the catalog.

Soft exchange rate bands and speculative attacks

Leonardo Bartolini

Soft exchange rate bands and speculative attacks

theory, and evidence from the ERM

by Leonardo Bartolini

  • 339 Want to read
  • 37 Currently reading

Published by Federal Reserve Bank of New York in [New York, N.Y.] .
Written in English

    Places:
  • Europe
    • Subjects:
    • Foreign exchange rates -- Europe -- Econometric models.,
    • Devaluation of currency -- Europe -- Econometric models.,
    • Monetary policy -- Europe -- Econometric models.

    • Edition Notes

      StatementLeonardo Bartolini and Alessandro Prati.
      SeriesStaff reports ;, no. 43, Staff reports (Federal Reserve Bank of New York : Online) ;, no. 43.
      ContributionsPrati, Alessandro, 1961-, Federal Reserve Bank of New York.
      Classifications
      LC ClassificationsHB1
      The Physical Object
      FormatElectronic resource
      ID Numbers
      Open LibraryOL3476900M
      LC Control Number2005616472

      This paper discusses the choice of exchange-rate regime. It is argued that in general floating is undesirable because of the extreme weakness of the economic mechanism that holds the exchange rate close to a level consistent with the fundamentals. Of the alternatives, fixed rates can occasionally make sense, where several conditions are all satisfied. Soft Exchange Rate Bands and Speculative Attacks; Theory, and Evidence from the ERM since August Soft exchange rate bands and speculative attacks: theory and evidence from the ERM since August 0: 0: 0: 0: 2: 8: 1, Target Zones and Forward Rates in a Model with Repeated Realignments: 0: 0: 0: 3: 0: 1: 6:

      Speculative Attacks and Currency Crisis Real exchange rate as a measure of from ECON at The Chinese University of Hong Kong. An Empirical Analysis of the Exchange Rate Regime in the Republic of Macedonia from the speculative attacks of the Denar3 which were overcome through high sale of the foreign reserves on the foreign exchange market by the Central Bank in the last quarter of and first quarter or keep the fix exchange rate that has been melting down Cited by: 1.

      This paper generalizes the target zone exchange rate as a model formalized by Krugman ().The main contributions of these pages consist in linking the recent developments in the theory of target zones to the mirror-image theory of speculative attacks on asset price fixing regimes and in using aspects of that linkage to give an intuitive interpretation to the “smooth-pasting” condition often. The idea is illustrated in the chart. An effective exchange rate is simulated over 50 days with a forward-looking moving average as the target exchange rate for each day. A higher and lower tolerable rate are defined in proportion to the target rate. As long as daily fluctuations remain within .


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Soft exchange rate bands and speculative attacks by Leonardo Bartolini Download PDF EPUB FB2

Get this from a library. Soft exchange rate bands and speculative attacks: theory, and evidence from the ERM since August [Leonardo Bartolini; Alessandro Prati; Federal Reserve Bank of New York.] -- "We present a model of a "soft" exchange rate target zone and interpret it as a stylized description of the post-August ERM.

Our central bank targets a moving average of the current and. We present a model of a “soft” exchange rate target zone and interpret it as a stylized description of the post-August 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 by: Bartolini, Leonardo & Prati, Alessandro, "Soft exchange rate bands and speculative attacks: theory, and evidence from the ERM since August ," Journal of International Economics, Elsevier, vol.

49(1), pagesOctober. Get this from a library. Soft exchange rate bands and speculative attacks: theory and evidence from the ERM since August [Leonardo Bartolini; Alessandro Prati; International Monetary Fund.

Research Department.] -- We present a model of a "soft" exchange rate target zone and interpret it as a stylized description of the post-August ERM.

Downloadable (with restrictions). We present a model of a “soft” exchange rate target zone and interpret it as a stylized description of the post-August 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. Cukierman et al. The Choice of Exchange-Rate Regime and Speculative Attacks models, the policies that ultimately lead to the collapse of xed exchange-rate regimes are speci ed exogenously, whereas in second-generation models, poli-cymakers play an active role in deciding whether or not to defend the currency against a speculative attack.

Soft exchange rate bands and speculative attacks theory, and evidence from the ERM / Catalog Record - Electronic Resource Available "We present a model of a "soft" exchange rate target zone and interpret it as a stylized description of the post-August ERM.

Our central bank targets a moving average of the current and past exchange rates rather than the exchange rate's current level, thus. How it works. A speculative attack in the foreign exchange market is the massive and sudden selling of a nation's currency, and can be carried out by both domestic and foreign investors.A speculative attack primarily targets currencies of nations that use a fixed exchange rate and have pegged their currency to a foreign currency, such as Hong Kong pegging the Hong Kong Dollar (HK$) to the.

Speculative Attacks and the Dynamics of Exchange Rates Stephen J. Turnovsky Kenyon College, Gambier, OH, This paper examines the issue of speculative attacks on the exchange rate in an economy in which. following the attack the government allows the exchange rate to float for a limited period, before repegging it at a higher Cited by: 2.

The range of exchange rates a central bank allows its currency to take. Exchange rate bands are used when one currency links its value to that of another currency but allows it to fluctuate within certain limits. Proponents maintain that exchange rate bands give a currency a certain level of flexibility so that it can respond to market factors while leaving control with the central bank.

The choice of exchange rate regime and speculative attacks Searching for the optimal regime within the class of exchange rate bands, we show that the optimal regime is either a peg (a zero-width band), a free float (an infinite-width band), or a non degenerate band.

Soft Exchange Rate Bands and Speculative Attacks: Theory, and Evidence From the ERM Since August Mr. Leonardo Bartolini We present a model of a “soft” exchange rate target zone and interpret it as a stylized description of the post-August ERM.5/5(2).

A currency band is a range of values for the exchange rate for a country’s currency which the country’s central bank acts to keep the exchange rate within. [citation needed]The central bank selects a range, or "band", of values at which to set their currency, and will intervene in the market or return to a fixed exchange rate if the value of their currency shifts outside this band.

In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. Exchange rates are determined in the foreign exchange market, which is open to a wide range of buyers and sellers where currency trading is continuous. In the retail currency exchange market, a different buying rate and selling.

Currency Band: A currency system that establishes a trading range that a currency's exchange rate can float between. A currency band represents the. This paper presents an empirical analysis of speculative attacks on pegged exchange rates in 22 countries between and We define speculative attacks or crises as large movements in exchange rates, interest rates, and international reserves.

We develop stylized facts concerning the. Particularly, foreign reserve losses, expansionary output, monetary and fiscal policies, an increase in inflation differentials and the share of short-term foreign currency-indexed debt, and an appreciation of the real exchange rate appear to have contributed to the speculative pressures and the associated regime by:   Speculation in a Semi-Fixed Exchange Rate.

Speculation is most likely to occur in a semi-fixed exchange rate, where a government is committed to keeping the value of a currency at a particular level. For example, suppose the UK government wished to keep the value of. The Choice of Exchange-Rate Regime and Speculative Attacks Article in Journal of the European Economic Association 2(6) February with 46 Reads How we measure 'reads'.

The equation also implies that the real exchange rate follows the nominal exchange rate. That is, an increase in e will increase the real exchange rate. Determining the Exchange Rate. The question to answer now is what determines the nominal exchange rates.

Here we focus on flexible exchange rates but fixed exchange rates will be discussed later. The Choice of Exchange Rate Bands: Balancing Credibility and Flexibility Article in SSRN Electronic Journal 62(2) February with 18 Reads How we measure 'reads'.This is a list of countries by their exchange rate regime.

No legal tender of their own US dollar as legal tender. British Virgin Islands Caribbean Netherlands Ecuador El Salvador Pegged exchange rate within horizontal bands Composite exchange rate anchor.Excess Volatility of Exchange Rates with Unobservable Fundamentals Review of International Economics,9, (3), View citations (3) Soft exchange rate bands and speculative attacks: theory, and evidence from the ERM since August Journal of International Economics,49, (1), View citations (11) See also Working.