devaluations are associated with costs in terms of higher (imported) inflation, successful interventions are followed by sluggish … inflation and a recession. Taken together, intervention is risky. If a central bank chooses to defend its currency it can avoid … (unsuccessful) defense and a devaluation, i.e. higher inflation and lower growth. In our global game approach, the strength of the …

credibility, because of time-inconsistency of the optimal policy under commitment, and (iii) coordination failure, because a …

credibility, because of time-inconsistency of the optimal policy under commitment, and (iii) coordination failure, because a …

credibility, because of time-inconsistency of the optimal policy under commitment, and (iii) coordination failure, because a …