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Is Foreign Exchange Intervention a Panacea in Diversified Circumstances? The Perspectives of Asymmetric Effects

Author

Listed:
  • Wenbo Wang

    (Department of International Business and Trade, Kyung Hee University, Seoul 02447, Korea)

  • Dieu Thanh Le

    (Economic Division, Embassy of the Korea, Hanoi 10000, Vietnam)

  • Hail Park

    (Department of International Business and Trade, Kyung Hee University, Seoul 02447, Korea)

Abstract

Owing to the country’s heavy reliance on exports, the role of foreign exchange intervention in South Korea’s economic development is self-evident. The effectiveness of the intervention is what we are concerned with in this paper. Recently, a growing body of literature has engaged in exploring the asymmetric effects of foreign exchange intervention both theoretically and empirically. Against this background, we employ a threshold vector autoregression (TVAR) model in parallel with its generalized impulse response functions (GIRFs) to show that there are asymmetric effects of the Bank of Korea (BOK)-led interventions regardless of the volatility regimes.

Suggested Citation

  • Wenbo Wang & Dieu Thanh Le & Hail Park, 2020. "Is Foreign Exchange Intervention a Panacea in Diversified Circumstances? The Perspectives of Asymmetric Effects," Sustainability, MDPI, vol. 12(7), pages 1-20, April.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:7:p:2913-:d:342024
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    References listed on IDEAS

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    Cited by:

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