Speculative Attacks on Fixed Exchange Rates (Japan-US Center UFJ Bank Monographs on International Financial Markets)
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Speculative Attacks on Fixed Exchange Rates (Japan-US Center UFJ Bank Monographs on International Financial Markets)

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Published by Cambridge University Press .
Written in English

Subjects:

  • Business & Economics,
  • Business & Economics / Economics / General,
  • Economics - General

Book details:

The Physical Object
FormatHardcover
ID Numbers
Open LibraryOL7748982M
ISBN 10052162066X
ISBN 109780521620666

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This paper presents an empirical analysis of speculative attacks on pegged exchange rates in 22 countries between and We define speculative attacks or crises as large movements in exchange rates, interest rates, and international reserves. We develop stylized facts concerning the univariate behavior of a variety of macroeconomic variables, comparing crises with periods of tranquility. This paper presents an empirical analysis of speculative attacks on pegged exchange rates in 22 countries between and We define speculative attacks or crises as large movements in exchange rates, interest rates, and international reserves. Central bank undertakes a fixed rate of growth of domestic credit As long as s, is fixed, at Or under floating (s =), move m to the RHS to get an equation that determines the exchange rate: API - bernoonduang.coml = + 𝑦–λΔse. = m - 𝑦 + λΔse. 𝑑(𝑁𝐷𝐴) 𝑑 /NDA = 𝑑(𝑛𝑑𝑎) 𝑑 ≡ μ. => nda t = nda 0 + μ t. 𝑑(𝑅). Interest rates and non fully credible fixed exchange rates If expected probability (10%) of a devaluation (30%): Expected depreciation is 3% so r-r€= (E e–E)/E + 3% If the fixed exchange rate is not fully credible: interest rate of country that fixes at Ē must be higher to compensate for possible depreciation.

A speculative attack primarily targets currencies of nations that use a fixed exchange rate and have pegged their currency to a foreign currency, such as Hong Kong pegging the Hong Kong Dollar (HK$) to the United States Dollar (US$) at an exchange rate of HK$ to US$1; generally the target currency is one whose fixed exchange rate may. Nov 10,  · Understanding Speculative Attacks – By Prof. Simply Simple We have all heard of Financial speculation, which involves the buying & selling of stocks, bon Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. There exist a whole range of exchange rate regimes. On the one end there is a completely flexible exchange rate. At the other end is a completely fixed exchange rate. In between these two extremes there exist many intermediate exchange rate regimes; these regimes have a . Against this background, various approaches have been developed by economists to cover the broad range of situations in which balance-of-payments crises occurred. Anja Zenker provides a comprehensive insight into the body of theoretical and empirical literature about currency speculation in fixed exchange rate .

An Interest Rate Defense of a Fixed Exchange Rate? by Robert P. Flood and Olivier Jeanne IMF, Research Dept. Draft March Abstract Defending a government’s exchange-rate commitment with active interest rate policy is not an option in the well-known Krugman-Flood-Garber (KFG) model of speculative attacks. In. The Operation and Collapse of Fixed Exchange Rate Regimes Peter M. Garber, Lars E.O. Svensson. NBER Working Paper No. Issued in December NBER Program(s):International Finance and Macroeconomics Program The paper reviews the recent literature on exchange rate target zones and on speculative attacks on fixed exchange rates. Mar 19,  · Speculation is most likely to occur in a semi-fixed exchange rate, where a government is committed to keeping the value of a currency at a particular level. For example, suppose the UK government wished to keep the value of the £ fixed at £1 = € Euros. Fixed exchange rate regime versus capital control. The belief that the fixed exchange rate regime brings with it stability is only partly true, since speculative attacks tend to target currencies with fixed exchange rate regimes, and in fact, the stability of the economic system is maintained mainly through capital control. A fixed exchange.