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The Role of Foreign Exchange Intervention in a Chaotic Dornbusch Model
Credit and Capital Markets – Kredit und Kapital, Vol. 33 (2000), Iss. 3 : pp. 309–345
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Sergio Da Silva, Birmingham and Brasilia
References
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Da Silva, S.: Exchange Rate Models, Chaos, and Foreign Exchange Intervention, PhD Thesis, Birmingham University Department of Economics, unpublished, 1999a.
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Da Silva, S.: Exchange Rate Dynamics Redux and Chaos, Birmingham University Department of Economics Discussion Paper, No. 99-08, 1999b.
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Gärtner, M.: Macroeconomics under Flexible Exchange Rates, New York: Harvester Wheatsheaf, 1993.
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Taylor, D.: Official Intervention in the Foreign Exchange Market, or, Bet Against the Central Bank, Journal of Political Economy 90(2), pp. 356-368, 1982.
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Abstract
Massive foreign exchange interventions are shown to remove chaos, cycles, and instability in the models of De Grauwe and Dewachter (1992) and De Grauwe, Dewachter, and Embrechts (1993), where the exchange rate can behave chaotically in the framework of the Dornbusch model. (JEL F31, F41, F47)