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dc.contributor.authorBauer, Christianen_US
dc.contributor.authorDe Grauwe, Paulen_US
dc.contributor.authorReitz, Stefanen_US
dc.date.accessioned2008-01-02en_US
dc.date.accessioned2009-07-28T08:16:13Z-
dc.date.available2009-07-28T08:16:13Z-
dc.date.issued2007en_US
dc.identifier.urihttp://hdl.handle.net/10419/26125-
dc.description.abstractThe target zone model of Krugman (1991) has failed empirically. In this paper, we develop a model of the exchange rate with heterogeneous agents in a free floating and a target zone regime. We show that this simple model mimics the empirical puzzles of exchange rates: excessive volatility, fat tails, volatility clustering, and disconnection from the fundamentals. In addition, the target zone regime replicates a reduced nominal volatility for the same level of fundamental volatility as in the free floating regime and the distribution of the exchange rate within the band is hump-shaped.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2080en_US
dc.subject.jelF31en_US
dc.subject.jelF41en_US
dc.subject.ddc330en_US
dc.subject.stwWechselkursen_US
dc.subject.stwTarget Zoneen_US
dc.subject.stwWertpapierhandelen_US
dc.subject.stwAnlageverhaltenen_US
dc.subject.stwAgent-based Modelen_US
dc.subject.stwTheorieen_US
dc.titleExchange rates dynamics in a target zone: a heterogeneous expectations approachen_US
dc.typeWorking Paperen_US
dc.identifier.ppn555917037en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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