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Reading a Target Zone in KeynesŠs Indian Currency and Finance

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  • Smith, Gregor W.

Abstract

The gold-exchange standard in India 1893–1913 was characterized by a narrow target zone for the exchange rate, a wide annual range for the international interest-rate differential, and negative (seasonal) autocorrelation in interest rates. These properties are consistent with a standard target-zone model in which fundamentals are negatively autocorrelated on a Markov chain.

Suggested Citation

  • Smith, Gregor W., 1994. "Reading a Target Zone in KeynesŠs Indian Currency and Finance," Queen's Economics Department Working Papers 273750, Queen's University - Department of Economics.
    • Handle: RePEc:ags:quedwp:273750
    DOI: 10.22004/ag.econ.273750
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    References listed on IDEAS

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    1. Robert P. Flood & Peter M. Garber, 1991. "The Linkage Between Speculative Attack and Target Zone Models of Exchange Rates," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1367-1372.
    2. Lars E. O. Svensson, 1991. "The Simplest Test of Target Zone Credibility," IMF Staff Papers, Palgrave Macmillan, vol. 38(3), pages 655-665, September.
    3. Svensson, Lars E. O., 1991. "Target zones and interest rate variability," Journal of International Economics, Elsevier, vol. 31(1-2), pages 27-54, August.
    4. Froot, Kenneth A. & Obstfeld, Maurice, 1991. "Exchange-rate dynamics under stochastic regime shifts : A unified approach," Journal of International Economics, Elsevier, vol. 31(3-4), pages 203-229, November.
    5. Lars E. O. Svensson, 1992. "An Interpretation of Recent Research on Exchange Rate Target Zones," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 119-144, Fall.
    6. Oskar Morgenstern, 1959. "International Financial Transactions and Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number morg59-1, January.
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    2. Flandreau, Marc & Oosterlinck, Kim, 2012. "Was the emergence of the international gold standard expected? Evidence from Indian Government securities," Journal of Monetary Economics, Elsevier, vol. 59(7), pages 649-669.

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