Chaotic exchange rate dynamics redux

This article generalizes the results shown in De Grauwe, Dewachter, and Emb rechts (1993) in a more sophisticated framework. In their model, the specul ative dynamics resulting from the interaction between chartists and fundame ntalists are incorporated into a Dornbusch-style model to generate a chaoti c nominal exchange rate. Here the model of Obstfeld and Rogoff (1995, 1996) replaces the Dornbusch model, and chaotic solutions are still shown to be possible for sensible parameter values.