Targeting the Exchange Rate Under Inflation

Shula Pessach and Assaf Razin

No 275558, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: The purpose of this paper is to implement empirically a variant of the new theory of exchange rate targeting, suitable for high inflation small open economies. We formulate an expectations induced relationship between the exchange rate and the fundamental subject to random shocks and target zone constraints on rates of depreciation. The empirical analysis provides estimates for the key parameters of the exchange rate dynamic equation, and thereby identifies the unique roles played by policy variables and market fundamentals in foreign exchange markets.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 24
Date: 1992-05
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/275558/files/TEL-AVIV-FSWP-195.pdf (application/pdf)

Related works:
Journal Article: Targeting the Exchange Rate under Inflation (1994)
Working Paper: Targeting the Exchange RAte under Inflation (1992)
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:ags:isfiwp:275558

DOI: 10.22004/ag.econ.275558

Access Statistics for this paper

More papers in Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().