The Linkage Between Speculative Attack and Target Zone Models of Exchange Rates.

In this paper we generalize the target zone exchange rate as model formalized by Krugman (1988b). The main contributions of these pages consist of linking the recent developments in the theory of target zones to the mirror image theory of speculative attacks on asset price fixing regimes and in usin...

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Bibliographic Details
Corporate Author: International Monetary Fund
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 1989.
Series:IMF Working Papers; Working Paper ; No. 1989/030
Online Access:Full text available on IMF
Description
Summary:In this paper we generalize the target zone exchange rate as model formalized by Krugman (1988b). The main contributions of these pages consist of linking the recent developments in the theory of target zones to the mirror image theory of speculative attacks on asset price fixing regimes and in using aspects of that linkage to give an intuitive interpretation to the 'smooth pasting' condition often invoked as a terminal condition. We aim to unify these two literatures by showing that the solution concepts in both are identical.
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Physical Description:1 online resource (24 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students