The Resource Rational speculation, financial crises, and optimal policy responses, Jay Surti

Rational speculation, financial crises, and optimal policy responses, Jay Surti

Label
Rational speculation, financial crises, and optimal policy responses
Title
Rational speculation, financial crises, and optimal policy responses
Statement of responsibility
Jay Surti
Creator
Contributor
Author
Issuing body
Subject
Language
eng
Summary
This paper develops a theory of the onset of financial crises by solving for the optimal trading strategies of speculators in financial markets, in a model where each speculator tries to coordinate her trades with the market's by observing the decisions of other speculators, while simultaneously trying to preempt the market. The interaction and resolution of these two conflicting incentives are analyzed under alternate central bank policy regimes. Our model explains how imperfect information structures prevent traders from exploiting profitable opportunities and suggests how large traders help alleviate this problem by undertaking risky arbitrage early in the investment process, in return for higher profits, if successful. The central bank's defense strategy is a parameter of this model. We compare the likelihood of a crisis under alternate defense strategies and show that credible monetary authorities can provide a better defense of exchange rate regimes against adverse shocks by not disclosing their commitment value to the market
Member of
Action
digitized
Cataloging source
OCLCE
Dewey number
332.11
Index
no index present
LC call number
HG3881.5.I58
LC item number
W67 no.04/25
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
Series statement
IMF working paper
Series volume
WP/04/25
Label
Rational speculation, financial crises, and optimal policy responses, Jay Surti
Publication
Antecedent source
file reproduced from original
Bibliography note
Includes bibliographical references (pages 27-28)
http://library.link/vocab/branchCode
  • net
Carrier category
online resource
Carrier category code
cr
Carrier MARC source
rdacarrier
Color
black and white
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Control code
ocn646927011
Dimensions
unknown
Extent
1 online resource (28 pages)
File format
one file format
Form of item
online
Isbn
9781451892093
Media category
computer
Media MARC source
rdamedia
Media type code
c
http://library.link/vocab/recordID
.b37166906
Reproduction note
Electronic reproduction.
Specific material designation
remote
System control number
  • (OCoLC)646927011
  • imf1281092878
System details
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002.

Library Locations

    • Deakin University Library - Geelong Waurn Ponds CampusBorrow it
      75 Pigdons Road, Waurn Ponds, Victoria, 3216, AU
      -38.195656 144.304955
Processing Feedback ...