Are exchange rate bands better than fixed exchange rates? The imported credibility approach

• 成果类型: Article
• 署名作者: Coles, M; Philippopoulos, A
• 署名单位: University of Essex
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(96)01459-6
• 发表日期: 1997
• 页码: 133-153
• 关键词: exchange rate bands; dynamic policy games; inflation

摘要

This paper explicitly incorporates exchange rate bands into the Barro-Gordon model of inflation. This is a non-trivial extension. Focusing on Markov-perfect equilibria, we specify the properties of the optimal policy functions, exchange rate dynamics and hence the arguments for and against target zones. The attractiveness of alternative exchange rate regimes (i.e. fixed, flexible and target zones) and the position of exchange rates inside the band depend on the inflationary performance of the center country.