This paper examines whether rational, fully informed speculators stabilize floating exchange rates. Friedman's claim that they must do so (1953), because they buy low and sell high, is challenged. Friedman excluded any consideration of interest rate differentials from his interpretation of...

This paper examines whether rational, fully informed speculators will smooth exchange rates. Friedman's (1953) claim that they must do so is challenged, based on the exclusion of interest rate differentials from his interpretation of speculator behavior. Once one recognizes that interest rates...

We use unique survey data from Bulgaria's currency board to examine the reasons for persistent incomplete credibility of a financial stabilization regime. Although it produced remarkably positive effects in terms of sustained low inflation since 1997, the currency board has not achieved full...

We use unique survey data from Bulgaria’s currency board to examine the reasons for persistent incomplete credibility of a financial stabilization regime. Although it produced remarkably positive effects in terms of sustained low inflation since 1997, the currency board has not achieved full...

Currency pegs seldom achieve full credibility even after delivering low inflation and a stable exchange rate for many years. We use unique survey data from Bulgaria's currency board to investigate the origins of incomplete credibility. We show that the limitations imposed by the currency board...

This article examines the tradeoffs between wages and job-related advertising in the recruitment of new employees. We hypothesize that when wages are limited by controls, firms increase their use of nonwage recruiting methods. We find support for this hypothesis by examining the effect of the...