Stabilizing instability-suboptimality-and-chaos-pronefluctuations at crisis junctures: Stochastic possibilitiesfor crisis management
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Dosyalar
Tarih
2021
Yazarlar
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Dergi ISSN
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Yayıncı
Wiley
Erişim Hakkı
info:eu-repo/semantics/embargoedAccess
Özet
There is a rich array of ways in which unstable, suboptimal and chaos-prone fluc-tuations could appear at crisis junctures. The richness of the patterns associatedwith such fluctuation s presents considerable challenges to the theory of crises aswell as the policies targeting various tendencies induced by crises. Dealing withcomplexly interwoven unstable , suboptimal and potentially chaotic tendencies isnot an easy task, which may require new combinations of methods analysing thecausal connections and feedback relations embedded in the web of relations char-acterizing the crisis-junctures. In this paper, we develop an illustrative dynamicmodel that takes into account such causally connected feedback relations so as toconstruct and simulate stochastic policy options, which can influence and helpstabilize unstable, suboptimal and chaotic trajectories of exchange rates at finan-cial crisis junctures. For reasons of convenience and practical relevance, we exem-plified such policies using taxes. One of the constructed examples makes use astochastic taxing policy to influence the coefficient of adjustment, which influ-ences the amount of adjustments and hence fluctuations in the market. We incor-porate a software-based optimization setup into the simulation model to find theoptimal values of the policy parameter to be used for the purpose of simulatingthe trajectories of the exchange rates. It turns out that the suggested policies couldinfluence/reduce the fluctuations in the market and hence help stabilize unstableorchaoticexchangeratetrajectories.Thesecondexampleinthepaperiscon-cerned with an empirical case relating to a particular financial crisis juncture ofTurkey during May–November 2018.
Açıklama
Anahtar Kelimeler
Chaos, Crisis, Instability, Stability
Kaynak
International Journal of Finance & Economics
WoS Q Değeri
Q4
Scopus Q Değeri
N/A
