Currency Bands, Target Zones, and Cash Limits: Thresholds for Monetary and Fiscal Policy

Marcus Miller and Paul Weller

No 1990/006, IMF Working Papers from International Monetary Fund

Abstract: Exchange rate behavior is analyzed in the context of a stochastic rational expectations model in which there are random shocks to the price setting mechanism and in which the authorities choose to impose either nominal or real exchange rate bands. Results are compared to those which emerge from a simple monetary model subject to velocity shocks. The effects of a realignment of the Band, and of fiscal policy used in conjunction with monetary policy to defend the band, are also examined.

Keywords: WP; currency band; price level; monetary policy; money stock; cash limit; exchange rate commitment; full employment; commitments of the EMS; Exchange rates; Currencies; Managed exchange rates; Monetary base; Real exchange rates; Global (search for similar items in EconPapers)
Pages: 42
Date: 1990-02-01
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=3040 (application/pdf)

Related works:
Working Paper: Currency Bonds, Target Zones and Cash Limits: Thresholds for Monetary and Fiscal Policy (1990)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1990/006

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().