Corrado, Luisa; Miller, Marcus; Zhang, Lei - Centro di Studi Internazionali Sull'Economia e la … - 2007
In this paper we show how trading rules can generate excess volatility in the exchange rate through repeated entry and exit of currency "bears" and "bulls". This is something of a caricature: but it allows us to show that official action can have self-ful.lling e¤ects as market composition...