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A chaotic model of the exchange rate: The role of fundamentalists and chartists

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Abstract

A monetary model of the exchange rate is constructed in which “fundamentalists” and “chartists” interact. It is shown that the non-linearity of this speculative dynamics leads to chaotic motion of the exchange rate. The model is also capable of generating some of the stylized facts of exchange rate dynamics.

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Authors and Affiliations

  1. National Fund for Scientific Research, University of Leuven, Belgium

    Paul de Grauwe & Hans Dewachter

Authors
  1. Paul de Grauwe
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  2. Hans Dewachter
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de Grauwe, P., Dewachter, H. A chaotic model of the exchange rate: The role of fundamentalists and chartists. Open Econ Rev 4, 351–379 (1993). https://doi.org/10.1007/BF01011136

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  • DOI: https://doi.org/10.1007/BF01011136

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