On the sustainability of exchange rate target zones with central parity realignments

Enrique Martínez García ()

No 243, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: I show that parity realignments alone do not suffice to ensure the long-run sustainability of an exchange rate target zone with imperfect credibility due to the gambler?s ruin problem. However, low credibility and frequent realignments can destabilize the exchange rate.

JEL-codes: E58 F31 F33 F41 G15 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2015-06-01
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-opm
Note: Published as: Martínez-García, Enrique (2015), "On the Sustainability of Exchange Rate Target Zones with Central Parity Realignments," Economics Letters 134: 86-89.
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.dallasfed.org/-/media/documents/resear ... papers/2015/0243.pdf Full text (application/pdf)

Related works:
Journal Article: On the sustainability of exchange rate target zones with central parity realignments (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:243

DOI: 10.24149/gwp243

Access Statistics for this paper

More papers in Globalization Institute Working Papers from Federal Reserve Bank of Dallas Contact information at EDIRC.
Bibliographic data for series maintained by Amy Chapman ().