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Rational Speculative Bubbles in an Exchange Rate Target Zone

Buiter, Willem H.; Pesenti, Paolo - C.E.P.R. Discussion Papers - 1990

The recent theory of exchange rate dynamics within a target zone holds that exchange rates under a currency band are … due to rational bubbles does not occur in the foreign exchange market. In this paper we consider instead a set-up in which … target zone in the presence of bubbles is viable if the Central Bank accommodates speculative attacks when the latter are …

Persistent link: https://www.econbiz.de/10005281297

Policy Evaluation and Design for Continuous Time Linear Rational Expectations Models: Some Recent Developments

Buiter, Willem H. - C.E.P.R. Discussion Papers - 1984

This paper surveys some recent developments in policy evaluation and design in continuous time linear rational expectations models. Much recent work in macroeconomics and open economy macroeconomics fits into this category. First the continuous time analogue of the discrete time solution method...

Persistent link: https://www.econbiz.de/10005792102

Granger Causality and Policy Ineffectiveness: A Rejoinder

Buiter, Willem H. - C.E.P.R. Discussion Papers - 1986

In an earlier paper "Granger-causality and Policy Effectiveness" Economica (1984), I showed that for a policy instrument x to Granger-cause some target variable y it is not necessary for x to be useful in controlling y. (The argument that it is not sufficient was already familiar, e.g. from the...

Persistent link: https://www.econbiz.de/10005504347