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Why Do Countries Float the Way They Float?
2000
Social Science Research Network
Countries that are classified as having floating exchange rate systems (or very wide bands) show strikingly different patterns of behavior. They hold very different levels of international reserves and allow very different volatilities to the movements of the exchange rate relative to the volatility that they tolerate either on the level of reserves or on interest rates. We document these differences and present a model that explains them as the optimal response of a Central Bank that attempts
doi:10.2139/ssrn.223650
fatcat:a3sb35rnizgrrgiz7u233h2yae