The credibility of the Venezuela crawling-band system
AbstractThis paper studies the credibility of the Venezuela crawling-band exchange rate regime during the period July, 1996-February, 2002. We show that, introducing some modifications, the credibility analysis widely applied to target zone regimes can also be used in studying the credibility of crawling- band regimes. In analyzing the credibility of the Venezuela crawling band, first we use the so-called simple credibility tests developed by Svensson (1991). Additionally, we estimate the expected rate of realignment using the drift- adjustment method. Both the credibility tests and the drift-adjustment method give similar results, showing that the crawling-band system was highly credible during the period.
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Bibliographic InfoArticle provided by UNIVERSIDAD DEL ROSARIO in its journal REVISTA DE ECONOMÍA DEL ROSARIO.
Volume (Year): (2006)
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crawling band exchange rate system; credibility; realignments;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
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"The Simplest Test of Target Zone Credibility,"
Papers, Stockholm - International Economic Studies
469, Stockholm - International Economic Studies.
- Lars E.O. Svensson, 1990. "The Simplest Test of Target Zone Credibility," NBER Working Papers 3394, National Bureau of Economic Research, Inc.
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"Stochastic Devaluation Risk and the Empirical Fit of Target Zone Models,"
NBER Working Papers
3576, National Bureau of Economic Research, Inc.
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- Bertola, G. & Svensson, L.E., 1990. "Stochastic Devaluation Risk and the Empirical Fit of Target Zone Models," Papers, Stockholm - International Economic Studies 481, Stockholm - International Economic Studies.
- Bertola, Giuseppe & Svensson, Lars E O, 1991. "Stochastic Devaluation Risk and the Empirical Fit of Target Zone Models," CEPR Discussion Papers, C.E.P.R. Discussion Papers 513, C.E.P.R. Discussion Papers.
- John Williamson, 1996. "Crawling Band as an Exchange Rate Regime: Lessons from Chile, Colombia and Israel, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, Peterson Institute for International Economics, number 14, July.
- Williamson, John, 1982. "A survey of the literature on the optimal peg," Journal of Development Economics, Elsevier, Elsevier, vol. 11(1), pages 39-61, August.
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