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Monetary Policy Rules And Macroeconomic Stabilization In Small Open Economies Under Behavioral Fx Trading: Insights From Numerical Simulations

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  • CHRISTIAN R. PROAÑO

Abstract

In this paper the interaction between FX markets driven by trading based on behavioral forecasting rules and the macroeconomy of a small open economy is investigated. A special focus of the paper is set on the consequences of chartism or technical analysis for the stability at the macroeconomic level. Furthermore, the performance of alternative monetary policy rules concerning the overall stabilization of the economy is investigated through numerical analysis.
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  • Christian R. Proaño, 2013. "Monetary Policy Rules And Macroeconomic Stabilization In Small Open Economies Under Behavioral Fx Trading: Insights From Numerical Simulations," Manchester School, University of Manchester, vol. 81(6), pages 992-1011, December.
    • Handle: RePEc:bla:manchs:v:81:y:2013:i:6:p:992-1011
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    File URL: http://hdl.handle.net/10.1111/manc.2013.81.issue-6
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    5. Kotb, Naira & Proaño Acosta, Christian, 2020. "Capital-constrained loan creation, stock markets and monetary policy in a behavioral new Keynesian model," BERG Working Paper Series 158, Bamberg University, Bamberg Economic Research Group.
    6. Lebogang Mateane & Christian R. Proaño, 2020. "Does monetary policy react asymmetrically to exchange rate misalignments? Evidence for South Africa," Empirical Economics, Springer, vol. 58(4), pages 1639-1658, April.

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    JEL classification:

    • F3 - International Economics - - International Finance
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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