Please use this identifier to cite or link to this item: http://hdl.handle.net/10316/11741
Title: Optimal monetary policy with a regime-switching exchange rate in a forward-looking model
Authors: Fernando, Alexandre 
Pedro, Bação 
John, Driffill 
Keywords: Exchange Rates; Monetary Policy; Markov Switching
Issue Date: 2007
Publisher: FEUC. Grupo de Estudos Monetários e Financeiros
Keywords: Exchange Rates; Monetary Policy; Markov Switching
Issue Date: 2007
Publisher: FEUC. Grupo de Estudos Monetários e Financeiros
Citation: Estudos do GEMF. 9 (2007)
Abstract: We evaluate the macroeconomic performance of different monetary policy rules when there is exchange rate uncertainty. We do this in the context of a non-linear rational expectations model. The exchange rate is allowed to deviate from its fundamental value and the persistence of the deviation is modeled as a Markov switching process. Our results suggest that taking into account the switching nature of the economy is important only in extreme cases.
URI: http://hdl.handle.net/10316/11741
Rights: openAccess
Appears in Collections:FEUC- Vários

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