Exchange rate dynamics in crawling-band systems

M. Isabel Campos () and Jose L. Torres ()
Additional contact information
M. Isabel Campos: Universidad de Valladolid

Economics Bulletin, 2007, vol. 6, issue 11, pages 1-10

Abstract: In this note we show that an exchange rate crawling-band system can borrow a portion of those aspects of a target zone that lead to its stabilizing effects on the exchange rate, depending on the relationship between the crawl rate and the drift of the fundamentals process. If the crawl rate is sufficiently high (with respect to the drift), the crawling-band is similar to a free float regime. As the crawl rate decreases, the crawling-band system collapses to a standard target zone.

Keywords: crawling band; Exchange rate; target zone (search for similar items in EconPapers)
JEL-codes: F3 (search for similar items in EconPapers)
Date: 2007 Written 2007-03-30
View list of references

Downloads: (external link)
http://economicsbulletin.vanderbilt.edu/2007/volume6/EB-06F30014A.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this article

More articles in Economics Bulletin from Economics Bulletin
Address: Economics Bulletin, Department of Economics, 414 Calhoun Hall, Vanderbilt University, Nashville TN 37235, USA
Series data maintained by John Conley ().