How Does Information Affect the Comovement Between Interest Rates and Exchange Rates?
|
digital
Article
€ 6.00
|
Article |
Ebook format Pdf readable on these devices:
|
|
|
|
|
This paper sets up a small open economy model to compare the link between exchange rates
and interest rates under full and imperfect information. The informational friction considered here
corresponds to the case where the central bank, while failing to observe output and inflation, can extract
some information about these variables from the private sector (asymmetric information with
signal extraction). This informational friction generates an optimal deviation from the full information
outcome, with the realisation of a relatively less frequent shock leading the central bank to behave
as if a more likely disturbance had instead taken place. This indicates that policies that would
be optimal under full information are not optimal when knowledge is imperfect.
|
Browse the archive
Recent issues
RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2023 - 3. A special issue on “Economic and Social Exclusion and the NEETs”
RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2023 - 2
RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2023 - 1. A special issue in honor of Gerd Weinrich
RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2023 - 2
RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2023 - 1. A special issue in honor of Gerd Weinrich
Available online
202320222021202020192018201720162015201420132012201120102009200820072006200520042003200220012000199919981997199619951994199319921991199019891988198719861985198419831982198119801979197819771976197519741973197219711970196919681967196619651964196319621961196019591958195719561955195419531952195119501949194819471946194219411940193919381937193619351934
