Detection of Implicit Fluctuation Bands and their Credibility in Candidate Countries
Simon Sosvilla-Rivero () and
María del Carmen Ramos-Herrera ()
Additional contact information
María del Carmen Ramos-Herrera: Department of Quantitative Economics, Universidad Complutense de Madrid
No 15-08, Working Papers from Asociación Española de Economía y Finanzas Internacionales
This paper attempts to identify implicit exchange rate regimes for currencies of candidate countries vis-à-vis the euro. To that end, we apply three sequential procedures that consider the dynamics of exchange rates to data covering the period from 1999:01 to 2012:12. Our results would suggest that implicit bands have existed in many sub-periods for almost all currencies under study. Once we detect de facto discrepancies between de facto and de iure exchange rate regimes, we make use of different methods to study the credibility of the detected fluctuation bands. The detected lack of credibility in a high percentage of the sample is robust using the Drift Adjustment method and discrete choice models, suggesting that economic agents do not behave as if these bands actually were in force at time of making their financial plans. These countries do not improve the confidence on the fluctuation bands as time evolves.
Keywords: exchange-rate regimes; implicit fluctuation bands; credibility; exchange rates. (search for similar items in EconPapers)
JEL-codes: F31 F33 (search for similar items in EconPapers)
Pages: 37 pages
New Economics Papers: this item is included in nep-dcm and nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Journal Article: Detection of implicit fluctuation bands and their credibility in EU candidate countries (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:aee:wpaper:1508
Access Statistics for this paper
More papers in Working Papers from Asociación Española de Economía y Finanzas Internacionales Contact information at EDIRC.
Bibliographic data for series maintained by Luis Miguel del Corral Cuervo ().