Browsing by Subject "targeting"
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Item Nominal exchange rate pegging, escape clauses and targeting of the real exchange rate(Texas A&M University, 2006-08-16) Gonzalez, PabloWe consider an economy under a fixed exchange rate system, but with bounds (a minimum level or a band) on the real exchange rate. The international price of the tradable good is characterized by the continuous arrival of shocks that change its level. In a model with microfoundations, we investigate the effects of targeting the real exchange rate through nominal exchange rate changes that preclude the real exchange from trespassing the imposed bounds. A stochastic general model with two goods and fixed non-tradable goods price level is developed. We analyze the cases in which a lower bound or a band on the real exchange rate is introduced. The general conclusion is that when bounds are established, then welfare effects can be expected, which are generated at the expense of the levels of consumption that go in the opposite direction than what policy intended. This short-run effect is present even in the case the targeting policy is never exercised. This result is similar to the one we find in the target zones literature, in the sense that just the existence of this tolerance band changes the behavior of the economy. An interesting result is that, in the case in which home goods prices are fixed, the imposition of the band on the real exchange rate does not change its behavior within the band. However, this result is not true of other real variables in the economy. In other words, although the targeted variable within the band behaves identically to the case in which there are no bounds, the rest of the real variables in the economy behave differently, even if the targeted variable remains within the band and the escape clause is not triggered.Item When Do Their Casualties Count? Exploring Wartime Decisions that Pit Security Against Harm(2011-02-22) Roblyer, Dwight AndrewThis dissertation offers a new understanding about wartime decision making in the face of likely, but unintended, harm to foreign civilians. It empirically identifies conditions under which leaders in democratic nations are more or less likely to choose to attack a target when confronted with a dilemma between pursuing national security objectives and avoiding civilian casualties. An innovative targeting decision model was constructed that described both the theorized structure of the decisions inputs and the process by which these inputs are assembled into a choice. The model went beyond the normal target benefit and civilian casualty cost considerations of proportionality to also include the contextual input of prospect frame. Decision makers were expected to address the same benefit and cost differently depending on whether they were winning or losing the conflict. This was because the prospect frame would influence their risk attitudes, as predicted by prospect theory. This model was then tested via two decision-making experiments that used military officers and defense civilians as participants. Additionally, a statistical analysis of data collected from an extended period of the second Intifada was done to seek evidence that the model also applied in actual wartime decision making. All three tests supported portions of the targeting decision model. Higher target benefit and lower civilian casualty estimates increased support for the planned attack. Prospect frame influenced decisions in the cases where both target value and the civilian casualty estimates were high and the resulting dilemma was very difficult. In these situations, those told that their forces were losing the conflict were less sensitive to humanitarian harm and more likely to support the attack than when they were told their side was winning. Furthermore, the Intifada data analysis of attacks approved by Israeli officials against Palestinians found this same effect of prospect frame held generally across all six years of observations.