Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26007 
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dc.contributor.authorde Grauwe, Paulen
dc.contributor.authorKaltwasser, Pablo Roviraen
dc.date.accessioned2007-07-24-
dc.date.accessioned2009-07-28T08:14:48Z-
dc.date.available2009-07-28T08:14:48Z-
dc.date.issued2007-
dc.identifier.urihttp://hdl.handle.net/10419/26007-
dc.description.abstractIn this paper we model how the existence of different beliefs about the underlying fundamental value of a currency affects the dynamics of the exchange rate. We find that a divergence of beliefs creates the potential for waves of optimism and pessimism that alternate in an unpredictable way. These waves are disconnected from the underlying (objective) fundamental value. We also find that in such a world there is sensitivity to initial conditions, i.e. small changes in beliefs can fundamentally alter the time path of the exchange rate.en
dc.language.isoengen
dc.publisher|aCenter for Economic Studies and ifo Institute (CESifo) |cMunichen
dc.relation.ispartofseries|aCESifo Working Paper |x1962en
dc.subject.jelC63en
dc.subject.jelG12en
dc.subject.jelG15en
dc.subject.ddc330en
dc.subject.stwWechselkurstheorieen
dc.subject.stwAnlageverhaltenen
dc.subject.stwPortfolio-Managementen
dc.subject.stwErwartungstheorieen
dc.subject.stwWertpapieranalyseen
dc.subject.stwSimulationen
dc.subject.stwTheorieen
dc.titleModeling optimism and pessimism in the foreign exchange market-
dc.typeWorking Paperen
dc.identifier.ppn538094346en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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