Series: IMF Working Papers
Author(s): Shujing Li , Isabel Yan , and Michael Kumhof
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 April 2007
Keywords: Balance of payments crisis, exchange rate targeting, flow speculative attack, inflation, exchange rate,
This paper analyzes a small open economy model under inflation targeting. It shows why such a monetary regime is vulnerable to speculative attacks that take place over a short period rather than instantaneously. Th...