The presence of target zone nonlinearities when narrower bands exist within official zones

Dirk Veestraeten (1)

1 Economics

The presence of target zone nonlinearities is generally refuted in empirical research. We argue that this may be due to estimation being performed vis-à-vis official limits when monetary authorities in fact are targeting a narrower band. Estimation results for the Belgian and French franc confirm that nonlinearities are present when narrower zones are accounted for.

Mots clés: Social Sciences & Humanities

Dirk Veestraeten. The presence of target zone nonlinearities when narrower bands exist within official zones. Applied Economics, 2007, 39 (04), pp.449-452. ⟨10.1080/00036840500428104⟩. ⟨hal-00581961⟩