A chaotic model of the exchange rate: The role of fundamentalists and chartists

A monetary model of the exchange rate is constructed in which “fundamentalists†and “chartists†interact. It is shown that the non-linearity of this speculative dynamics leads to chaotic motion of the exchange rate. The model is also capable of generating some of the stylized facts of exchange rate dynamics. Copyright Kluwer Academic Publishers 1993exchange rate, chaos, fundamentalism, chartism,