Target zones in History and Theory : efficiency, credibility and policy autonomy
AbstractA natural experiment with an exchange-rate band in Austria-Hungary in the early 20th century provides a rare opportunity to discuss critical aspects of the theory of target zones. Providing a new derivation of the target zone model as a set of nested hypotheses, the inference is drawn that policy credibility and market efficiency were paramount in the success of the Austro-Hungarian experience.
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Bibliographic InfoPaper provided by Sciences Po in its series Sciences Po publications with number n°5199.
Date of creation: Aug 2005
Date of revision:
target zone; market efficiency; monetary policy; covered interest parity;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- N32 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - U.S.; Canada: 1913-
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