Unstable Exchange Rates Lead to Persistent Fluctuations in Global Markets.
The article presents a model of how exchange rates behave between two countries. By using an evolutionary algorithm, the researchers found that the exchange rate can show persistent fluctuations instead of stabilizing. This happens because agents in the model adapt their decision-making rules over time. The study also compares the performance of agents who make decisions based on expectations with those who make errors. The model is calibrated to match real-world exchange rate behaviors.