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https://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 | 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: | https://hdl.handle.net/10316/11741 | Rights: | openAccess |
Appears in Collections: | FEUC- Vários |
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Optimal monetary policy with a regime-switching exchange rate.pdf | 429.84 kB | Adobe PDF | View/Open |
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