Using an Artificial Market Approach to Analyze Exchange Rate Scenarios
In this study we used a new agent-based artificial market approach, to support decision-making on exchange rate policies. We first interviewed dealers and found that interaction among dealers in terms of learning had similar features to genetic operations in biology. Next, we constructed an artificial market model by using a genetic algorithm and regarding the market as a multi-agent system. Finally, using computer simulation of the model, several strategic scenarios in terms of policies to do with exchange rates were compared. As a result, it was found that intervention, and the control of interest rates, were effective measures in the stabilization of yen-dollar rates in 1998.
KeywordsExchange Rate Interest Rate Foreign Exchange Market Genetic Operation Exchange Rate Policy
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