Interest Rate Defense against Speculative Attack as a Signal
Interest Rate Defense against Speculative Attack as a Signal
A Primer
This chapter deals with an interest rate defense against a speculative attack on a currency regime. It argues that a major effect of high interest rates is to signal the government's willingness or ability to defend the exchange rate against a potential crisis. It explores a class of models in which an interest rate defense alters the speculators' views of the type of government they face, introduces an alternative way of defending a currency system and considers the information an interest rate defense conveys about the ability of a government to defend.
Keywords: interest rate, currency system, exchange rate, government, speculators
Chicago Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
Please, subscribe or login to access full text content.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.
