Foreign Exchange Risk in the EMS
本文分析了欧洲货币体系目标区汇率制度中，放弃汇率调整与实际汇率位置无关这一假设后，汇率动态可能发生的显著变化。
Starting with the seminal paper by Krugrnan (fust circulated in 1987, published in 1991) a large number of vauers in which exchange raie' dynamics in a target z& regime like hione in the EMS have been analyzed. In the fust generation of these models the central banks are assumed to be able 6 convince the market that the exchange rate will stay within the zone with certainty. However, there is ample evidence that situations may arise in which central banks are not able to support a given target zone. In the second generation of target zone models the possibility of a realignment is thus included However, in these models independence between the realignment and the actual location of the exchange rate within the zone is usually assumed This paper analyses the consequences of doing away with this unrealistic restriction It is shown that the dynamics may change considerably.