Non-linearities in the relation between
β
Carlo Altavilla; Paul De Grauwe
π
Article
π
2008
π
John Wiley and Sons
π
English
β 417 KB
## Abstract We develop a simple theoretical model in which chartists and fundamentalists interact. The model predicts the existence of different regimes, and thus nonβlinearities in the link between the exchange rate and its fundamentals. We test the model empirically by adopting a Markovβswitching