Handbook of nature-inspired and innovative computing: integrating classical models with emerging technologies

As computing devices proliferate, demand increases for an understanding of emerging computing paradigms and models based on natural phenomena. This handbook explores the connection between nature-inspired and traditional computational paradigms. It presents computing paradigms and models based on natural phenomena

Monetary Coordination, Fixed Exchange Rates and Noisy Markets

With common global shocks, a leader-follower fixed-exchange-rate regime improves on a non-cooperative flexible-rate regime when the spillover effects from each country;s money supply to the other country\u27s output are symmetric. However, small exchange market shocks, from random capital flows, may undermine the incentives for either country to be the follower. Furthermore, a regime in which exchange rates are fixed when transitory exchange-market shocks are small and flexible with larger shock always dominates a flexible-rate regime, in marked contrast to (credible) target-zone models that call for pegged rates only at upper or lower bounds in response to large shocks