Rational Expectations, Endogenous Currency Substitution, and Exchange Rate Determination
用代际模型从微观最优化推导本外币需求，发现无政策时汇率恒定且不确定，并论证国家为何可能实施概率性资本管制，该管制能产生唯一的汇率路径。
The paper employs the intergenerational model to derive the demands for domestic and foreign currencies from microeconomic optimizing behavior. In the absence of government policy, we obtain the Kareken and Wallace result that exchange rates are constant and indeterminate. We discuss the reasons why nations may find it in their interests to impose probabilistic capital controls. It is shown that the imposition of probabilistic capital controls yields a unique (generally nonstationary) exchange rate path and that this path is determined in accord with the Monetary Approach. As the probability of controls tends to zero, the exchange rate remains determinate.