Speculative Bubbles Speculative Attacks And Policy Switching
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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 | : Martin Sola |
Publisher | : |
Total Pages | : |
Release | : 1991 |
Genre | : |
ISBN | : |
Download Essays on Speculative Attacks on Fixed Exchange Rate Regimes, Speculative Bubbles and Endogenous Switching Regime Estimation Book in PDF, Epub and Kindle
Author | : Mr.Guillermo Calvo |
Publisher | : International Monetary Fund |
Total Pages | : 7 |
Release | : 1991-01-01 |
Genre | : Business & Economics |
ISBN | : 1451926510 |
Download Speculative Attacks Book in PDF, Epub and Kindle
A brief survey of the literature on speculative attacks is provided. The nature and causes of balance-of-payments crises, the implications for the behavior of the current account and the real exchange rate are discussed. Also, potential areas for future research on balance-of-payments crises are suggested.
Author | : Willem H. Buiter |
Publisher | : |
Total Pages | : 60 |
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 | : Robert P. Flood |
Publisher | : |
Total Pages | : 31 |
Release | : 1996 |
Genre | : |
ISBN | : |
Download Speculative attacks : fundamentals and self-fulfilling prophecies Book in PDF, Epub and Kindle
Author | : Maria Soledad Martinez Peria |
Publisher | : |
Total Pages | : 54 |
Release | : 2016 |
Genre | : |
ISBN | : |
Download A Regime-Switching Approach to Studying Speculative Attacks Book in PDF, Epub and Kindle
A regime-switching framework is used to study speculative attacks against European Monetary System currencies during 1979-93.Peria uses a regime-switching framework to study speculative attacks against European Monetary System (EMS) currencies during 1979-93.She identifies speculative attacks by modeling exchange rates, reserves, and interest rates as time series subject to discrete regime shifts. She assumes two states: tranquil and speculative.She models the probabilities of switching between states as a function of fundamentals and expectations. She concludes that:- The switching models with time-varying transition probabilities capture most of the conventional episodes of speculative attacks.- Speculative attacks do not always coincide with currency realignments.- Both economic fundamentals and expectations determine the likelihood of switching from a period of tranquility to a speculative attack. The budget deficit appears to be an especially important factor driving the probability of switching to a speculative regime.Given the importance of anticipating and, wherever possible, avoiding crises, it might be useful to conduct forecasting exercises to determine whether the switching framework proposed here can be used to forecast crises in countries outside the sample.Because currency crises tend to occur simultaneously in two or more countries, it also might be useful to adapt the regime-switching framework to explore the role of contagion in explaining crises.This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to understand currency crises. The author may be contacted at [email protected].
Author | : Mr.Robert P. Flood |
Publisher | : International Monetary Fund |
Total Pages | : 64 |
Release | : 1991-10-01 |
Genre | : Business & Economics |
ISBN | : 1451852185 |
Download Speculative Attacks and Models of Balance of Payments Crises Book in PDF, Epub and Kindle
This paper reviews recent developments in the theoretical and empirical analysis of balance-of-payments crises. A simple analytical model highlighting the process leading to such crises is first developed. The basic framework is then extended to deal with a variety of issues, such as: alternative post-collapse regimes, uncertainty, real sector effects, external borrowing and capital controls, imperfect asset substitutability, sticky prices, and endogenous policy switches. Empirical evidence on the collapse of exchange rate regimes is also examined, and the major implications of the analysis for macroeconomic policy discussed.
Author | : Mr.Subir Lall |
Publisher | : International Monetary Fund |
Total Pages | : 38 |
Release | : 1997-12-01 |
Genre | : Business & Economics |
ISBN | : 1451980205 |
Download Speculative Attacks, Forward Market Intervention and the Classic Bear Squeeze Book in PDF, Epub and Kindle
A typical strategy used by speculators to launch an attack on a fixed exchange regime is the use of forward markets. Central banks also intervene in forward markets to counter speculation. This paper addresses the question of how an attack is launched on the forward market, and what the optimal policy response to such speculation is in the forward and spot markets. The paper also demonstrates how central banks can impose a bear squeeze on speculators. Recent events in South East Asian currency markets are interpreted within the framework of the model’s predictions.
Author | : Peter M. Garber |
Publisher | : MIT Press |
Total Pages | : 180 |
Release | : 2001-08-24 |
Genre | : Business & Economics |
ISBN | : 9780262571531 |
Download Famous First Bubbles Book in PDF, Epub and Kindle
The jargon of economics and finance contains numerous colorful terms for market-asset prices at odds with any reasonable economic explanation. Examples include "bubble," "tulipmania," "chain letter," "Ponzi scheme," "panic," "crash," "herding," and "irrational exuberance." Although such a term suggests that an event is inexplicably crowd-driven, what it really means, claims Peter Garber, is that we have grasped a near-empty explanation rather than expend the effort to understand the event. In this book Garber offers market-fundamental explanations for the three most famous bubbles: the Dutch Tulipmania (1634-1637), the Mississippi Bubble (1719-1720), and the closely connected South Sea Bubble (1720). He focuses most closely on the Tulipmania because it is the event that most modern observers view as clearly crazy. Comparing the pattern of price declines for initially rare eighteenth-century bulbs to that of seventeenth-century bulbs, he concludes that the extremely high prices for rare bulbs and their rapid decline reflects normal pricing behavior. In the cases of the Mississippi and South Sea Bubbles, he describes the asset markets and financial manipulations involved in these episodes and casts them as market fundamentals.
Author | : Daniel Salinas Perea |
Publisher | : |
Total Pages | : 182 |
Release | : 2004 |
Genre | : Currency crises |
ISBN | : |
Download Causes, Effects and Policy Issues of Managing Speculative Attacks Book in PDF, Epub and Kindle