The Stability of Flexible Exchange Rates--The Canadian Experience

1969 ◽  
Vol 2 (2) ◽  
pp. 324 ◽  
Author(s):  
R. G. Penner ◽  
G. Hartley Mellish ◽  
Robert G. Hawkins
Keyword(s):  
Exchange Rates ◽  
Canadian Experience ◽  
The Stability ◽  
Flexible Exchange Rates

scholarly journals Numerical Exploration of Kaldorian Interregional Macrodynamics: Enhanced Stability and Predominance of Period Doubling under Flexible Exchange Rates

2010 ◽  
Vol 2010 ◽  
pp. 1-29 ◽  
Author(s):  
Toichiro Asada ◽  
Christos Douskos ◽  
Vassilis Kalantonis ◽  
Panagiotis Markellos
Keyword(s):  
Exchange Rates ◽  
Government Expenditure ◽  
Period Doubling ◽  
Numerical Approach ◽  
Capital Movement ◽  
Dimensional Parameter ◽  
Stability Of Equilibrium ◽  
The Stability ◽  
Flexible Exchange Rates ◽  
Enhanced Stability

We present a discrete two-regional Kaldorian macrodynamic model with flexible exchange rates and explore numerically the stability of equilibrium and the possibility of generation of business cycles. We use a grid search method in two-dimensional parameter subspaces, and coefficient criteria for the flip and Hopf bifurcation curves, to determine the stability region and its boundary curves in several parameter ranges. The model is characterized by enhanced stability of equilibrium, while its predominant asymptotic behavior when equilibrium is unstable is period doubling. Cycles are scarce and short-lived in parameter space, occurring at large values of the degree of capital movementβ. By contrast to the corresponding fixed exchange rates system, for cycles to occur sufficient amount of trade is requiredtogetherwith high levels of capital movement. Rapid changes in exchange rate expectations and decreased government expenditure are factors contributing to the creation of interregional cycles. Examples of bifurcation and Lyapunov exponent diagrams illustrating period doubling or cycles, and their development into chaotic attractors, are given. The paper illustrates the feasibility and effectiveness of the numerical approach for dynamical systems of moderately high dimensionality and several parameters.

scholarly journals Numerical Exploration of Kaldorian Macrodynamics: Enhanced Stability and Predominance of Period Doubling and Chaos with Flexible Exchange Rates

2008 ◽  
Vol 2008 ◽  
pp. 1-23 ◽  
Author(s):  
Toichiro Asada ◽  
Christos Douskos ◽  
Panagiotis Markellos
Keyword(s):  
Exchange Rates ◽  
Stability Region ◽  
Extreme Values ◽  
Period Doubling ◽  
Model Parameters ◽  
Flip Bifurcation ◽  
Bifurcation Curve ◽  
The Stability ◽  
Flexible Exchange Rates ◽  
Enhanced Stability

We explore a discrete Kaldorian macrodynamic model of an open economy with flexible exchange rates, focusing on the effects of variation of the model parameters, the speed of adjustment of the goods marketα, and the degree of capital mobilityβ. We determine by a numerical grid search method the stability region in parameter space and find that flexible rates cause enhanced stability of equilibrium with respect to variations of the parameters. We identify the Hopf-Neimark bifurcation curve and the flip bifurcation curve, and find that the period doubling cascades which leads to chaos is the dominant behavior of the system outside the stability region, persisting to large values ofβ. Cyclical behavior of noticeable presence is detected for some extreme values of a state parameter. Bifurcation and Lyapunov exponent diagrams are computed illustrating the complex dynamics involved. Examples of attractors and trajectories are presented. The effect of the speed of adaptation of the expected rate is also briefly discussed. Finally, we explore a special model variation incorporating the “wealth effect” which is found to behave similarly to the basic model, contrary to the model of fixed exchange rates in which incorporation of this effect causes an entirely different behavior.

The canadian experience with flexible exchange rates

1976 ◽  
Vol 4 (2) ◽  
pp. 19-30 ◽  
Author(s):  
M. A. Akhtar ◽  
A. K. M. A. Rob
Keyword(s):  
Exchange Rates ◽  
Canadian Experience ◽  
Flexible Exchange Rates
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