Hurley, Margaret J. (1998) The scope for monetary independence in exchange rate target zones broad and narrow. Economics Letters, 59. pp. 97-105. ISSN 0165-1765

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Abstract

Placing limits on the movement of economic fundamentals in order to maintain an exchange rate within a target zone also puts a target zone around interest rate differentials. The bandwidth of exchange rate and interest rate differentials target zones will be different except at one point; it is suggested that this point gives a useful partitioning of target zones into broad and narrow categories. For realistic parameter values, this occurs at an exchange rate target zone of plus or minus 3.2%.

Item Type:	Article
Keywords:	Exchange rates; Target zones; Bandwidths; Monetary independence; Exchange rate mechanism bandwidths; Economics; target zones; exchange rate mechanism; exchange rates; monetary independence;
Academic Unit:	Faculty of Social Sciences > Economics, Finance and Accounting
Item ID:	11414
Identification Number:	https://doi.org/10.1016/S0165-1765(98)00007-X
Depositing User:	Margaret Hurley
Date Deposited:	24 Oct 2019 15:33
Journal or Publication Title:	Economics Letters
Publisher:	Elsevier
Refereed:	Yes
URI:	Publisher

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