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The scope for monetary independence in exchange rate target zones broad and narrow
Hurley, Margaret J.
Placing limits on the movement of economic fundamentals in order to maintain an exchange rate within a target zone also puts a target zone around interest rate differentials. The bandwidth of exchange rate and interest rate differentials target zones will be different except at one point; it is suggested that this point gives a useful partitioning of target zones into broad and narrow categories. For realistic parameter values, this occurs at an exchange rate target zone of plus or minus 3.2%.
Keyword(s): Exchange rates; Target zones; Bandwidths; Monetary independence; Exchange rate mechanism bandwidths; Economics; target zones; exchange rate mechanism; exchange rates; monetary independence
Publication Date:
1998
Type: Journal article
Peer-Reviewed: Yes
Institution: Maynooth University
Citation(s): Hurley, Margaret J. (1998) The scope for monetary independence in exchange rate target zones broad and narrow. Economics Letters, 59. pp. 97-105. ISSN 0165-1765
Publisher(s): Elsevier
File Format(s): other
Related Link(s): http://mural.maynoothuniversity.ie/11414/1/MH_Scope_1998.pdf
First Indexed: 2020-04-02 06:08:47 Last Updated: 2020-04-02 06:08:47