The credibility of the Venezuela crawling-band system

  1. Campos, Maria I. 1
  2. Torres, Jose L. 2
  3. Villegas, Esmeralda 3
  1. 1 Universidad de Valladolid (España)
  2. 2 Universidad de Málaga (España)
  3. 3 Universidad de Zulia (Venezuela)
Journal:
Revista de economía del Rosario

ISSN: 0123-5362

Year of publication: 2006

Volume: 9

Issue: 2

Pages: 111-123

Type: Article

More publications in: Revista de economía del Rosario

Abstract

This paper studies the credibility of the Venezuela crawling-bandex change rate regime during the period July, 1996-February, 2002. We show that, introducing some modifications, the credibility analysis widely applied to target zone regimes can also be used in studying the credibility of crawling-band regimes. In analyzing the credibility of the Venezuela crawling band, first we use the so-called simple credibility tests developed by Svensson (1991).Additionally, we estimate the expected rate of realign mentusing the drift-adjustment method. Both the credibility tests and the drift-adjustment method give similar results, showing that the crawling-band system was highly credibleduring the period.