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

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  • Paul Grauwe
  • Hans Dewachter

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. Copyright Kluwer Academic Publishers 1993

Suggested Citation

  • Paul Grauwe & Hans Dewachter, 1993. "A chaotic model of the exchange rate: The role of fundamentalists and chartists," Open Economies Review, Springer, vol. 4(4), pages 351-379, December.
    • Handle: RePEc:kap:openec:v:4:y:1993:i:4:p:351-379
    DOI: 10.1007/BF01011136
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    References listed on IDEAS

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