Asymmetric Central Bank Reaction Functions: An Application of Smooth Transition Regression.

This paper estimates a simple model of exchange rate policy where the Central Bank optimises an objective function which takes into account competitiveness, its commitment to the EMU and the cost of adjustment. We allow for asymmetry in government behaviour whereby a key paremeter, the marginal adjustment cost of the effective exchange rate, takes on a continuum of values depending on the value of the DeutscheMark/Irish pound exchange rate.

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Year of publication:	1999
Authors:	Denny, K.
Institutions:	School of Economics, University College Dublin
Subject:	TIME SERIES \| EXCHANGE RATE

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Series:	College Dublin, Department of Political Economy-.
Type of publication:	Book / Working Paper
Notes:	9 pages
Classification:	C22 - Time-Series Models ; F31 - Foreign Exchange ; F41 - Open Economy Macroeconomics
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005646810