Economists Pierre-Richard Agénor and Luiz Awazu Pereira da Silva say they have created a simple model that reflects key details of how managed floating exchange rate regimes work in practice.

Agénor and Pereira da Silva note that many central banks, particularly in emerging markets, operate using a mix of tools to set monetary policy while controlling volatile capital flows. But, they add, existing models that capture these tools tend to be “fairly complex and often cannot be solved