Why Have a Target Zone

@inproceedings{Krugman1992WhyHA,
  title={Why Have a Target Zone},
  author={P. Krugman and Marcus H. Miller},
  year={1992}
}
The desire to avoid speculative runs on currencies appears to be one of the main reasons leading policy-makers to impose currency bands, but the standard analysis of target zones rules out any speculative inefficiencies by assumption. As an alternative we first present simple models of excess volatility due to stop-loss trading and then go on to consider what target zones might accomplish in this context. The principal result is that the speculation of informed traders shifts from being… Expand

References

SHOWING 1-10 OF 18 REFERENCES
...
1
2
...