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Dynamic Speculative Attacks Author info | Abstract | Publisher info | Download info | Related research | Statistics Christophe Chamley
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This paper presents a model of rational Bayesian agents with speculative attacks in a regime of exchange rate which is pegged within a band. Speculators learn from the observation of the exchange rate within the band whether their mass is sufficiently large for a successful attack. Multiple periods are necessary for the existence of speculative attacks. Various defense policies are analyzed. A trading policy by the central bank may defend the peg if it is unobserved and diminishes the market's information for the coordination of speculators.
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Article provided by American Economic Association in its journal American Economic Review .
Volume (Year): 93 (2003)
Issue (Month): 3 (June)
Pages: 603-621
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Handle: RePEc:aea:aecrev:v:93:y:2003:i:3:p:603-621Contact details of provider: Email: Web page: http://www.aeaweb.org/aer/ More information through EDIRC
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