a r t i c l e i n f o This paper investigates the sources of exchange rate fluctuations when monetary policy follows a Taylor rule interest rate reaction function. We first present a simple dynamic exchange rate model with Taylor rule fundamentals which is triangular in the long-run impacts of shocks to the output market, the interest rate differential, and the Taylor rule. We then proceed to a...

We show that a reinforcement learning method, adaptive critic based approximate dynamic programming, can be used to create fuzzy policy managers for adaptive control of a logistic system. Two different architectures are used for the policy manager, a feed forward neural network, and a fuzzy rule base. For both architectures, policy managers are trained that outperform LP and GA derived fixed po...

In this paper we study the inefficiencies of the monetary equilibrium and optimal monetary policies in a search economy. We show that the same frictions that give fiat money a positive value generate an inefficient quantity of goods in each trade and an inefficient number of trades (or search decisions). The Friedman rule eliminates the first inefficiency and the Hosios rule the second. A monet...