On nash equilibria in speculative attack models

Arbeitspapier

Since a fixed exchange rate regime is a fixed price system, there is no theoretical reason to presume that the foreign exchange market clears, particularly during a speculative attack. This paper shows that equilibria where we allow for the possibility of such corner solutions are a superset of the previously examined "market-clearing" equilibria. The timing of the balance-of-payments crisis is no longer predictable in the same sense - multiple equilibria exist even in the very simplest speculative attack model.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: UCD Centre for Economic Research Working Paper Series ; No. WP16/13

Classification and Topics

• Classification: Wirtschaft ; Foreign Exchange ; Central Banks and Their Policies

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pastine, Ivan
• Event: Veröffentlichung
• (who): University College Dublin, UCD School of Economics
• (where): Dublin
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/175472
• Last update: 10.03.2025, 11:43 AM CET