The credibility of the Venezuela crawling-band system

María I. Campos (), Jose Torres () and Esmeralda Villegas ()

Revista de Economía del Rosario, 2006, No 3580

Abstract: This paper studies the credibility of the Venezuela crawling-band exchange rate regime during the period July, 1996-February, 2002. We show that, introducing some modifications, the credibility analysis widely applied to target zone regimes can also be used in studying the credibility of crawling- band regimes. In analyzing the credibility of the Venezuela crawling band, first we use the so-called simple credibility tests developed by Svensson (1991). Additionally, we estimate the expected rate of realignment using the drift- adjustment method. Both the credibility tests and the drift-adjustment method give similar results, showing that the crawling-band system was highly credible during the period.

Keywords: crawling band exchange rate system; credibility; realignments (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:col:000151:003580

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