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Target zones in History and Theory : efficiency, credibility and policy autonomy

Author

Listed:
  • Marc Flandreau

    (Centre for Finance and Development - GRADUATE INSTITUTE OF INTERNATIONAL AND DEVELOPMENT STUDIES)

  • John Komlos

    (Department of Economics - Tilburg University [Netherlands])

Abstract

A 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.

Suggested Citation

  • Marc Flandreau & John Komlos, 2005. "Target zones in History and Theory : efficiency, credibility and policy autonomy," Working Papers hal-01065605, HAL.
    • Handle: RePEc:hal:wpaper:hal-01065605
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01065605
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    References listed on IDEAS

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    1. Paul Hallwood, C. & MacDonald, Ronald & Marsh, Ian W., 2000. "Realignment expectations and the US dollar, 1890-1897: Was there a 'Peso problem'?," Journal of Monetary Economics, Elsevier, vol. 46(3), pages 605-620, December.
    2. John Komlos & Marc Flandreau, "undated". "Core or Periphery? The Credibility of the Austro-Hungarian Currency, 1867-1913," Articles by John Komlos 4, Department of Economics, University of Munich.
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    Cited by:

    1. Marc Flandreau, 2006. "The logic of compromise : monetary bargaining in Austria-Hungary 1867-1913," Working Papers hal-01065619, HAL.
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    More about this item

    Keywords

    target zone; market efficiency; monetary policy; covered interest parity;
    All these keywords.

    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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