Manuscript received 16.10.09; final version received 6.2.12.
MONETARY POLICY RULES AND MACROECONOMIC STABILIZATION IN SMALL OPEN ECONOMIES UNDER BEHAVIORAL FX TRADING: INSIGHTS FROM NUMERICAL SIMULATIONS*
Article first published online: 1 NOV 2012
© 2012 The Author. The Manchester School © 2012 John Wiley & Sons Ltd and The University of Manchester
The Manchester School
Volume 81, Issue 6, pages 992–1011, December 2013
How to Cite
PROAÑO, C. R. (2013), MONETARY POLICY RULES AND MACROECONOMIC STABILIZATION IN SMALL OPEN ECONOMIES UNDER BEHAVIORAL FX TRADING: INSIGHTS FROM NUMERICAL SIMULATIONS. The Manchester School, 81: 992–1011. doi: 10.1111/j.1467-9957.2012.02308.x
- Issue published online: 8 OCT 2013
- Article first published online: 1 NOV 2012
In this paper the interaction between foreign exchange (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.