SHERP

Optimal Target Zone and Stability Tradeoff

Cited 0 time in webofscience Cited 0 time in scopus
Authors
Jeong, ChanWoo
Issue Date
2000
Publisher
Seoul Journal of Economics
Citation
Seoul Journal of Economics 13 (No. 1 2000): 49-68
Keywords
target zone regime; band width; price stability
Abstract
Conventional literature on exchange rates largely ignores
normative issues of the target zone regime. This paper builds a
model for the optimal target zone and consider s whether the
target zone is desired compared to other exchange rate regimes.
The paper find s that when the central bank's objective is to
minimize the sum of price and output variances. a target zone
regime is superior to a fixed or floating exchange rate. In
determining the band width, a tradeoff exists between output
and price stability, with a wider band producing smaller output
variability and larger price variability.
ISSN
1225-0279
Language
English
URI
http://hdl.handle.net/10371/1192
Files in This Item:
Appears in Collections:
College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.13(1) (Spring 2000)
  • mendeley

Items in S-Space are protected by copyright, with all rights reserved, unless otherwise indicated.

Browse