@techreport{NBERw2835,
 title = "Exchange Rate Dynamics Under Stochastic Regime Shifts:  A Unified Approach",
 author = "Kenneth A. Froot and Maurice Obstfeld",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "2835",
 year = "1992",
 month = "June",
 URL = "http://www.nber.org/papers/w2835",
 abstract = {Techniques of regulated Brownian motion are used to analyze the behavior of the exchange rate when official policy reaction functions are subject to future stochastic changes. We examine exchange-rate dynamics in alternative cases where the authorities promise (i) to confine a floating rate within a predetermined range and (ii) to peg the currency once it reaches a predetermined future level. Similarities between these and several related examples of regime switching are stressed},
}