Divergence from de jure exchange rate regime: a stochastic process of learning
AbstractThis article provides a model framework to characterize the process of stochastic learning during the period of divergence from a de jure currency regime. The model outcome shows that divergence from a de jure regime is a process of slow learning in small steps, which indicates that the learning completes over time. Therefore, divergence does not have a long-term effect on the distribution of exchange rate regime. Empirical illustration indicates that countries work toward the development of their financial sector during the period of divergence.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 16 (2009)
Issue (Month): 5 ()
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