The recent theory of exchange rate dynamics within a target zone holds that exchange rates under a currency bard are … rational bubbles does not occur in the foreign exchange market. In this paper we consider instead a setup in which the … the presence of bubbles is viable if the Central Bank accommodates speculative attacks when the latter are consistent with …

The recent theory of exchange rate dynamics within a target zone holds that exchange rates under a currency bard are … rational bubbles does not occur in the foreign exchange market. In this paper we consider instead a setup in which the … the presence of bubbles is viable if the Central Bank accommodates speculative attacks when the latter are consistent with …

depress consumption in the short run while boosting it in the long run. -- Wealth effect ; house prices ; speculative bubbles …

consumption in the short run while boosting it in the long run. -- Wealth effect ; house prices ; speculative bubbles …