Chaotic Exchange Rate Dynamics Redux

Sergio Da Silva

Open Economies Review, 2001, vol. 12, issue 3, 304 pages

Abstract: This article generalizes the results shown in De Grauwe, Dewachter, and Embrechts (1993) in a more sophisticated framework. In their model, the speculative dynamics resulting from the interaction between chartists and fundamentalists are incorporated into a Dornbusch-style model to generate a chaotic nominal exchange rate. Here the model of Obstfeld and Rogoff (1995, 1996) replaces the Dornbusch model, and chaotic solutions are still shown to be possible for sensible parameter values. Copyright Kluwer Academic Publishers 2001

Keywords: chaos; exchange rates; new open economy macroeconomics; speculative dynamics (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1023/A:1011181423098

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