Publication

May 2002

This paper analyzes how the formation of exchange rate expectations shapes the effects of monetary policy shocks in open economies. It focuses in particular on the actions of 'noise traders', which it defines as financial market participants whose demand for financial securities is not influenced by economic fundamentals alone. The paper employs a dynamic general equilibrium optimizing two-country model.

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Author Christian Pierdzioch
Series Kiel Institute Working Papers
Issue 1109
Publisher Kiel Institute for the World Economy
Copyright © 2002 Kiel Institute for the World Economy
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