Stochastic Shocks, Fads and Exchange Rate Fundamentals: An Empirical Evaluation of the Target Zone Proposal

  • Nicos M. Christodoulakis
Part of the International Economic Association Series book series (IEA)


Real exchange rate misalignments between the G3 economies — US$, DM and Yen blocs — have always attracted attention in the discussion of international policy coordination. In fact, the very existence of exchange rate deviations from what is considered the ‘normal level’ was frequently the primary motive for considering macroeconomic policy coordination between different countries. One of the proposals that has strongly influenced the recent debate on policy coordination between the major economies has been the target zone (TZ) scheme, originated by Williamson (1985) and subsequently extended and elaborated by Williamson and Miller (1987), their colleagues and other researchers.


Exchange Rate Monetary Policy Current Account Fiscal Policy Real Exchange Rate 
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Copyright information

© International Economic Association 1993

Authors and Affiliations

  • Nicos M. Christodoulakis
    • 1
  1. 1.Athens University of EconomicsGreece

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