Target Zones in Theory and History: Credibility, Efficiency, and Policy Autonomy

A natural experiment with an exchange-rate band in Austria-Hungary in the early 20th century provides a rare opportunity to discuss critical aspects of the theory of target zones. Providing a new derivation of the target zone model as a set of nested hypotheses, the inference is drawn that policy credibility and market efficiency were paramount in the success of the Austro-Hungarian experience.

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Year of publication:	2005-08
Authors:	Flandreau, Marc ; Komlos, John
Institutions:	C.E.P.R. Discussion Papers
Subject:	Austria-Hungary \| covered interest parity \| credibility \| market efficiency hypothesis \| monetary model \| monetary policy \| target zone

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 5199
Classification:	F31 - Foreign Exchange ; N32 - U.S.; Canada: 1913-
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005661480