Abstract
In this chapter the behaviour of the financial model, described in the previous chapter, is analysed under different exogenous disturbances. All disturbances are of the unexpected kind and can thus be considered as ‘news’. It is well known from the rational expectations literature that only expected disturbances are already reflected in prices, exchange rates, and interest rates.
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© 1985 Paul De Grauwe, Michele Fratianni and Mustapha K. Nabli
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De Grauwe, P., Fratianni, M., Nabli, M.K. (1985). Policy Choices under Different Exchange Rate Regimes. In: Exchange Rates, Money and Output. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17699-1_7
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DOI: https://doi.org/10.1007/978-1-349-17699-1_7
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-17701-1
Online ISBN: 978-1-349-17699-1
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)