Ertugrul, Ayse; Héricourt, Jérôme; Reynaud, Julien - Maison des Sciences Économiques, Université Paris 1 … - 2004
This article suggests a new type of reaction function fitting monetary policymaker's behaviour when constrained by a fixed exchange rate. Firstly, it incorporates new target variables, which are different from the ones commonly observed by central banks in a flexible exchange rate environment....