Implicit Bands in the Yen/Dollar Exchange Rate

Universidad de La Laguna Economic Working Paper No. 2004-02

28 Pages Posted: 7 Jan 2005

See all articles by Francisco Ledesma Rodríguez

Francisco Ledesma Rodríguez

University of La Laguna - Department of Applied Economics

Manuel Navarro Ibáñez

University of La Laguna - Department of Applied Economics

Jorge Pérez Rodríguez

University of Las Palmas de Gran Canaria - Faculty of Economic Science

Simon Sosvilla-Rivero

UCM Institute for Economic Analysis

Date Written: September 2004

Abstract

This paper attempts to identify implicit exchange rate regimes for the Yen/Dollar exchange rate. To that end, we apply a sequential procedure that considers both the dynamics of exchange rates and central bank interventions to data covering the period from 1971 to 2003. Our results would suggest that implicit bands existed in two subperiods: April-December 1980 and March-December 1987, the latter coinciding with the Louvre Accord. Furthermore, the study of the credibility of such implicit bands indicates the high degree of confidence attributed by economic agents to the evolution of the the Yen/Dollar exchange rate within the detected implicit band rate, thus lending further support to the relevance of such implicit bands.

Keywords: Exchange rate regimes, Implicit fluctuation bands, exchange rates

JEL Classification: F31, F33

Suggested Citation

Ledesma Rodríguez, Francisco J. and Navarro Ibáñez, Manuel and Pérez Rodríguez, Jorge and Sosvilla-Rivero, Simon, Implicit Bands in the Yen/Dollar Exchange Rate (September 2004). Universidad de La Laguna Economic Working Paper No. 2004-02. Available at SSRN: https://ssrn.com/abstract=643541 or http://dx.doi.org/10.2139/ssrn.643541

Francisco J. Ledesma Rodríguez

University of La Laguna - Department of Applied Economics ( email )

Facultad de Ciencias Economicas
Campus de Guajara
38071 La Laguna
Spain
+34 922 31 71 19 (Phone)
+34 922 31 78 53 (Fax)

Manuel Navarro Ibáñez

University of La Laguna - Department of Applied Economics ( email )

Facultad de Ciencias Economicas
Campus de Guajara
La Laguna, Santa Cruz de Tenerife 38071
Spain
+34 922 31 71 11 (Phone)

Jorge Pérez Rodríguez

University of Las Palmas de Gran Canaria - Faculty of Economic Science ( email )

Dpto. de Metodos Cuantitativo Campus de Tafira, Tafira Baja
E-35017 Las Palmas
Spain
+34 928 458222 (Phone)
+34 928-458225 / 1829 (Fax)

HOME PAGE: http://fcee.ulpgc.es/~jorge/

Simon Sosvilla-Rivero (Contact Author)

UCM Institute for Economic Analysis ( email )

Carretera de Humera s/n
Madrid, Madrid 28223
Spain
+34913932626 (Phone)

HOME PAGE: http://www.ucm.es/info/ecocuan/ssr/

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