@techreport{NBERw3418,
 title = "Target Zones with Limited Reserves",
 author = "Paul Krugman and Julio Rotemberg",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "3418",
 year = "1990",
 month = "August",
 URL = "http://www.nber.org/papers/w3418",
 abstract = {Like a fixed exchange rate, a target zone system may be subject to speculative attacks when the reserves of the central bank are limited. This
paper analyzes such speculative attacks and their implications; it shows that the recently developed "smooth pasting" model of target zones should be viewed as a special case that emerges only when reserves are sufficiently large. The paper then uses the target zone framework to resolve a seeming paradox in predicting speculative attacks on a gold standard, arguing that such a standard may best be viewed as the boundary between one-sided target zones.},
}