13 Speculative Attack and Target Zone Models of Exchange Rates
Author:
Mr. Jacob A. Frenkel https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Mr. Jacob A. Frenkel in
Current site
Google Scholar Close
and
Mr. Morris Goldstein https://isni.org/isni/0000000404811396 International Monetary Fund

Search for other papers by Mr. Morris Goldstein in
Current site
Google Scholar Close
Language:
English
Print Publication Date:
24 Apr 1996
Keywords:
BOOK; exchange rate; nominal interest rate; EC country; deutsche mark; policy rule; exchange-rate crisis; Exchange rates; Real exchange rates; Currencies; Inflation; Global; Europe; Asia and Pacific; North America; Middle East; exchange rate solution; continuity in the face; exchange rate continuity; policy authority; perverse exchange rate movement; Exchange rate arrangements; Exchange rate modelling; Managed exchange rates; Exchange rate flexibility

Abstract

This paper generalizes the target zone exchange rate as a model formalized by Krugman (1988). 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 invoked as a terminal condition. We aim to unify these two literatures by showing that the solution concepts in both are identical.

Within Same Series

Other IMF Content

Other Publishers Content

  • Collapse
  • Expand
Cover Functioning of the International Monetary System
Functioning of the International Monetary System
ISBN:
9781557755544
Publication Date:
24 Apr 1996
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781557755544.071
Pages:
507