Arbeitspapier
If the markka floated: Simulating the BOF4 model with fixed and floating exchange rates
In this paper the BOF4 model of the Bank of Finland, which is estimated in a fi xed exchange rate - regime, i s transformed into a model with a floating exchange, rate. In endogenizing the exchange rate two al ternative assumpti ons about the formati on of exchange rate expectations are used, i.e. static and marketspecific (MS) rational expectations. We found that under static expectations the adjustment paths of the exchange rate were very volatile when shocks originated from the financial market. In response to real shocks, however, the results were not sensitive with respect to the alternative expectations formation schemes. In the case of MS-rational expectations the reactions of the exchange rate to real ,and financial shocks were, also somewha't greater than typically presented in the literature. In addition, the response paths were highly cyclical.
- ISBN
-
951-686-163-6
- Language
-
Englisch
- Bibliographic citation
-
Series: Bank of Finland Discussion Papers ; No. 17/1988
- Classification
-
Wirtschaft
- Event
-
Geistige Schöpfung
- (who)
-
Willman, Alpo
- Event
-
Veröffentlichung
- (who)
-
Bank of Finland
- (where)
-
Helsinki
- (when)
-
1988
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Willman, Alpo
- Bank of Finland
Time of origin
- 1988
Other Objects (12)
Simulating the effects of imperfect credibility: How does the Peso problem affect the real economy?
Fixed rate tenders and the overnight money market equilibrium
Floating exchange rates and capital mobility
Fixed rate loan contracts, maturity transformation and competition in the deposit market
Bidding in fixed rate tenders: Theory and experience with the ECB tenders
Analysis on the errors and omissions in the Finnish balance of payments: restless capital movements, floating exchange rate and errors since 1991
Simulating interbank payments and securities settlement mechanism with the BoF-PSS2 simulator
Firm turnover in the export market and the case for fixed exchange rate regime
Estimating exchange market pressure and the degree of exchange market intervention for Finland during the floating exchange rate regime
The feasibility of through-the-cycle ratings
The power of forward guidance and the fiscal theory of the price level
The euro crisis: a view from the North
Simulating the effects of imperfect credibility: How does the Peso problem affect the real economy?
Fixed rate tenders and the overnight money market equilibrium
Floating exchange rates and capital mobility
Fixed rate loan contracts, maturity transformation and competition in the deposit market
Bidding in fixed rate tenders: Theory and experience with the ECB tenders
Analysis on the errors and omissions in the Finnish balance of payments: restless capital movements, floating exchange rate and errors since 1991
Simulating interbank payments and securities settlement mechanism with the BoF-PSS2 simulator
Firm turnover in the export market and the case for fixed exchange rate regime
Estimating exchange market pressure and the degree of exchange market intervention for Finland during the floating exchange rate regime
The feasibility of through-the-cycle ratings
The power of forward guidance and the fiscal theory of the price level
The euro crisis: a view from the North
Simulating the effects of imperfect credibility: How does the Peso problem affect the real economy?
Fixed rate tenders and the overnight money market equilibrium
Floating exchange rates and capital mobility
Fixed rate loan contracts, maturity transformation and competition in the deposit market
Bidding in fixed rate tenders: Theory and experience with the ECB tenders
Analysis on the errors and omissions in the Finnish balance of payments: restless capital movements, floating exchange rate and errors since 1991
Simulating interbank payments and securities settlement mechanism with the BoF-PSS2 simulator
Firm turnover in the export market and the case for fixed exchange rate regime
Estimating exchange market pressure and the degree of exchange market intervention for Finland during the floating exchange rate regime
The feasibility of through-the-cycle ratings
The power of forward guidance and the fiscal theory of the price level