Optimal Target Zone and Stability Tradeoff

• 발행기관: 서울대학교 경제연구소
• 저자명: Chan-Woo Jeong
• 간행물 정보: 『Seoul Journal of Economics』Seoul Journal of Economics Volume 13 No.1, 49~68쪽, 전체 19쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2000.03.31

영문 초록

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.

목차

Abstract

Ⅰ. Introduction

Ⅱ. The Model

Ⅲ. A Tradeoff between Price and Output Stability

Ⅳ. The Case of the Standard Normal Distribution

Ⅴ. Optimal Band Width

Ⅵ. Conclusion

References