Article | Econometrica

Stochastic Process Switching: Some Simple Solutions

by K. A. Froot and M. Obstfeld

Keywords: Currencies; Exchange rates; International macroeconomics; monetary policy; Currency controls; Fixed exchange rates; Floating exchange rates; Currency bands; Currency zones; Currency areas; rational expectations; Asset Pricing;


Froot, K. A., and M. Obstfeld. "Stochastic Process Switching: Some Simple Solutions." Econometrica 59, no. 1 (January 1991): 241–250. (Revised from NBER Working Paper No. 2998, July 1989. Reprinted in Exchange Rates and Currency Bonds, edited by P. Krugman and M. Miller. London: CEPR, 1991.)