Rational Speculative Bubbles In An Exchange Rate Target Zone
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Author | : Willem H. Buiter |
Publisher | : |
Total Pages | : 68 |
Release | : 1990 |
Genre | : Commerce |
ISBN | : |
Download Rational Speculative Bubbles in an Exchange Rate Target Zone Book in PDF, Epub and Kindle
The recent theory of exchange rate dynamics within a target zone holds that exchange rates under a currency bard are less responsive to fundamental shocks than exchange rates under a free float, provided that the intervention rules of the Central Bank(s) are common knowledge. These results are derived after having assumed a priori that excess volatility due to rational bubbles does not occur in the foreign exchange market. In this paper we consider instead a setup in which the existence of speculative behavior is a datum the Central Bank has to deal with. We show that the defense of the target zone in the presence of bubbles is viable if the Central Bank accommodates speculative attacks when the latter are consistent with the survival of the target zone itself and expectations are self-fulfilling. These results hold for a large class of exogenous and fundamental-dependent bubble processes. We show that the instantaneous volatility of exchange rates within a bard is not necessarily less than the volatility under free float and analyze the implications for interest rate differential dynamics.
Author | : Willem H. Buiter |
Publisher | : |
Total Pages | : 0 |
Release | : 1991 |
Genre | : |
ISBN | : |
Download Rational Speculative Bubbles in an Exchange Rate Target Zone : Presented at the Second International Macroeconomics Programme Meeting, Madrid, Spain, 7nd and 8nd June 1991 Book in PDF, Epub and Kindle
Author | : Robert P. Flood |
Publisher | : MIT Press |
Total Pages | : 528 |
Release | : 1994 |
Genre | : Business & Economics |
ISBN | : 9780262061698 |
Download Speculative Bubbles, Speculative Attacks, and Policy Switching Book in PDF, Epub and Kindle
The papers in this book are grouped into three sections: the first on price bubbles is primarily financial; the second on speculative attacks (on exchange rate regimes) is international in scope; and the third, on policy switching, is concerned with monetary policy.
Author | : Mrs.Teresa Ter-Minassian |
Publisher | : International Monetary Fund |
Total Pages | : 1146 |
Release | : 1997-09-10 |
Genre | : Business & Economics |
ISBN | : 9781557756633 |
Download Fiscal Federalism in Theory and Practice Book in PDF, Epub and Kindle
Over the past few decades, a clear trend has emerged worldwide toward the devolution of spending and, to a lesser extent, revenue-raising responsibilities to state and local levels of government. One view is that the decentralization of spending responsibilities can entail substantial gains in terms of distributed equity and macroeconomic management. The papers in this volume, edited by Teresa Ter-Minassian, examine the validity of these views in light of theoretical considerations, as well as the experience of a number of countries.
Author | : Matthias Salge |
Publisher | : Springer Science & Business Media |
Total Pages | : 270 |
Release | : 2012-12-06 |
Genre | : Business & Economics |
ISBN | : 3642591817 |
Download Rational Bubbles Book in PDF, Epub and Kindle
3 On the Economic Relevance of Rational Bubbles 79 3. 1 Capital markets . . . . . . . . . 80 3. 1. 1 Efficient capital markets 86 3. 1. 2 Rational bubbles on capital markets. 93 3. 1. 3 Economic caveats . 103 3. 2 Foreign exchange markets 109 3. 3 Hyperinflation. . . . . . . 117 4 On Testing for Rational Bubbles 123 4. 1 Indirect tests . . . . . . . . . 123 4. 1. 1 Variance bounds tests 124 4. 1. 2 Specification tests . . . 137 4. 1. 3 Integration and cointegration tests 140 4. 1. 4 Final assessment of indirect tests . 150 4. 1. 5 A digression: Charemza, Deadman (1995) analysis. 151 4. 2 Direct tests . . . . . . . . . . . . . . . . . . . . . . . . 157 4. 2. 1 Deterministic bubble in German hyperinflation. 158 4. 2. 2 Intrinsic bubbles on stock markets. 163 4. 2. 3 An econometric caveat . . . . . 168 4. 2. 4 Final assessment of direct tests 172 5 On the Explanatory Power of Rational Bubbles on the G- man Stock Market 175 5. 1 Data . . . . . . . 175 5. 2 Direct test for rational bubbles 181 5. 2. 1 Temporary Markovian bubbles. 184 5. 2. 2 Temporary intrinsic bubbles . . 193 ix 5. 2. 3 Permanent intrinsic bubbles 198 5. 3 A digression: Testing for unit roots 204 6 Concluding Remarks 215 A Results 221 A. 1 Temporary markovian bubbles. 221 A. 2 Temporary intrinsic bubbles . . 225 A. 3 Permanent intrinsic bubbles - Class 1 to 2 229 A. 4 Permanent intrinsic bubbles - Class 3 to 6 230 A. 5 Integration tests. . . . . . . . . . . . . . .
Author | : Laura Tao |
Publisher | : |
Total Pages | : 98 |
Release | : 2010 |
Genre | : Foreign exchange rates |
ISBN | : |
Download Testing for Rational Speculative Bubbles in Foreign Exchange Rates Book in PDF, Epub and Kindle
Author | : G.M. Grossman |
Publisher | : Elsevier |
Total Pages | : 902 |
Release | : 1995-12-13 |
Genre | : Business & Economics |
ISBN | : 9780444815477 |
Download Handbook of International Economics Book in PDF, Epub and Kindle
This reference accords recognition to the recent revolution in macroeconomics wrought by imperfect competition. Grossman and Rogoff (Princeton U.) present chapters by two dozen contributors on two prime areas of research interest: international trade theory and policy (e.g. strategic trade patterns and policies, the relationship between trade and technological progress), and open economy macroeconomics and international finance (covering such topics as exchange rates, foreign lending, and policy coordination). The volume commences with Krugman's overview of the positive theory of international trade, and concludes with analyses of sovereign debt. Annotation copyrighted by Book News, Inc., Portland, OR.
Author | : Arturo José Galindo |
Publisher | : |
Total Pages | : 146 |
Release | : 1999 |
Genre | : |
ISBN | : |
Download Essays on Speculative Attacks and Exchange Rate Target Zones Book in PDF, Epub and Kindle
Author | : Paul de Grauwe |
Publisher | : Oxford University Press, USA |
Total Pages | : 296 |
Release | : 1996 |
Genre | : Business & Economics |
ISBN | : |
Download International Money Book in PDF, Epub and Kindle
The period since the Second World war has been an eventful and often disturbing one in the international monetary field. Economic theories have been propounded and modified both to explain these events and to influence future choices made by economic actors. This history of international monetary relations shows both how theoretical development affected private developments, and how the theories themselves have been judged - and often discarded - on the basis of their perceived accordance with actuality. Exchange rate movements in particular are examined in the light of the absence of any generally accepted fundamental model, and the author deploys here his own theory based on the idea of bounded rationality. Finally, he looks ahead to future possibilities for the international monetary system. New in the Second Edition Fully revised and updated Includes an account of the EMS up till the end of 1995 Fuller theoretical coverage of fixed exchange rate systems, including the modelling of speculative attacks Covers chaos theory and near-rational behaviour Includes new sections on: speculators and speculative bubbles; target zones and other proposals for international monetary reform; the importance of free capital mobility and proposals to control capital movements.
Author | : Leonardo Leiderman |
Publisher | : Cambridge University Press |
Total Pages | : 400 |
Release | : 1994-07-14 |
Genre | : Business & Economics |
ISBN | : 9780521454384 |
Download Capital Mobility Book in PDF, Epub and Kindle
This edited volume examines capital mobility in both industrialised and developing countries.