Using an Artificial Market Approach to Analyze Exchange Rate Scenarios

  • Kiyoshi Izumi
  • Kazuhiro Ueda
Part of the Studies in Fuzziness and Soft Computing book series (STUDFUZZ, volume 100)


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.


Exchange Rate Interest Rate Foreign Exchange Market Genetic Operation Exchange Rate Policy 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Kiyoshi Izumi
    • 1
  • Kazuhiro Ueda
    • 2
  1. 1.Information Science Div.ETL and PRESTO, Japan Science & Technology CorporationTsukuba, IbarakiJapan
  2. 2.Interfaculty Initiative of Information StudiesUniv. of TokyoMeguro-ku, TokyoJapan

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