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The Forward Exchange Market, Speculation, and Exchange Market Intervention

Eaton, Jonathan - 1983

This paper develops a stochastic equilibrium model of an open economy incorporating speculation in the forward exchange … market. The model is used to examine two issues. The first is the role of speculation in stabilizing the economy against … stochastic disturbances. Much risk averse speculation stabilizes domestic income against disturbances in the domestic bond market …

Persistent link: https://www.econbiz.de/10012477963

Models of Currency Crises with Self-Fulfilling Features

Obstfeld, Maurice - 1995

The discomfort a government suffers from speculation against its currency determines the strategic incentives of …

Persistent link: https://www.econbiz.de/10012473585

Speculative Attacks on Pegged Exchange Rates : An Empirical Exploration with Special Reference to the European Monetary System

Eichengreen, Barry - 1994

This paper presents an empirical analysis of speculative attacks on pegged exchange rates in 22 countries between 1967 and 1992. We define speculative attacks or crises as large movements in exchange rates, interest rates, and international reserves. We develop stylized facts concerning the...

Persistent link: https://www.econbiz.de/10012474009

Competitiveness, Realignment, and Speculation : The Role of Financial Markets

Obstfeld, Maurice - 1988

factors behind domestic inflation. Under a policy regime in which domestic inflation automatically triggers devaluation, the … economy can undergo self-fulfilling depreciation-inflation spirals, triggered by speculative attack on the exchange rate. Such … spirals do not occur when realignments do not offset past inflation fully. The second set of results shows how an exchange …

Persistent link: https://www.econbiz.de/10012476528

Rational Speculative Bubbles in an Exchange Rate Target Zone

Buiter, Willem H. - 1990

The recent theory of exchange rate dynamics within a target zone holds that exchange rates under a currency bard are …

Persistent link: https://www.econbiz.de/10012475560

The Micro-Macro Disconnect of Purchasing Power Parity

Bergin, Paul R. - 2009

This paper reconciles the persistence of aggregate real exchange rates with the faster adjustment of international relative prices in microeconomic data. Panel estimation of an error correction model using a micro data set uncovers new stylized facts regarding this puzzle. First, adjustment to...

Persistent link: https://www.econbiz.de/10012463026

Contagious Currency Crises

Eichengreen, Barry - 1996

This paper is concerned with the fact that the incidence of speculative attacks tends to be temporally correlated; that is, currency crises appear to pass contagiously from one country to another. The paper provides a survey of the theoretical literature, and analyzes the contagious nature of...

Persistent link: https://www.econbiz.de/10012473161

The Logic of Currency Crises

Obstfeld, Maurice - 1994

Once one recognizes that governments borrow international reserves and exercise other policy options to defend fixed exchange rates during currency crises, the question arises: What factors determine a government's decision to abandon a currency peg or hang on? In a setting of purposeful action...

Persistent link: https://www.econbiz.de/10012474296

Target Zones with Limited Reserves

Krugman, Paul - 1990

paper analyzes such speculative attacks and their implications; it shows that the recently developed "smooth pasting" model of target zones should be viewed as a special case that emerges only when reserves are sufficiently large. The paper then uses the target zone framework to resolve a...

Persistent link: https://www.econbiz.de/10012475613

Peso Problems and Heterogeneous Trading : Evidence From Excess Returns in Foreign Exchange and Euromarkets

Evans, Martin D. - 1992

Theoretical and empirical studies have treated excess returns as processes with time-varying but temporary disturbances. By contrast, empirical evidence indicates that the behavior of asset price levels can be well-approximated by processes with some permanent disturbances. These two...

Persistent link: https://www.econbiz.de/10012474977

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