Soft Exchange Rate Bands and Speculative Attacks : Theory, and Evidence from the ERM since August 1993 »
Series: IMF Working Papers
Author(s): Leonardo Bartolini , and Alessandro Prati
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 November 1998
Keywords: Exchange rate target zones, speculative attacks, exchange rate, exchange rates, equation, exchange rate target, currency markets
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 excha...