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Intervention as information: a survey

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  • Richard T. Baillie
  • Owen F. Humpage
  • William P. Osterberg

Abstract

Research has generally failed to find reliable connections between official exchange-market interventions and exchange rates that are consistent with either a monetary or a portfolio-balance theory of exchange-rate determination. Recently economists have suggested that intervention might sometimes influence exchange rates through its effects on agents’ expectations. This survey discusses newer research that analyzes informational aspects of intervention.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 9918.

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Date of creation: 1999
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Handle: RePEc:fip:fedcwp:9918

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Keywords: Foreign exchange - Law and legislation;

This paper has been announced in the following NEP Reports:

References

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  1. Bhattacharya, Utpal & Weller, Paul, 1997. "The advantage to hiding one's hand: Speculation and central bank intervention in the foreign exchange market," Journal of Monetary Economics, Elsevier, Elsevier, vol. 39(2), pages 251-277, July.
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  3. repec:fth:michin:412 is not listed on IDEAS
  4. Rasmus Fatum & Michael M. Hutchison, . "Is Intervention a Signal of Future Monetary Policy? Evidence from the Federal Funds Futures Market," EPRU Working Paper Series, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics 96-13, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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  7. Dominguez & K., 1997. "The Market Microstructure of Central Bank Intervention," Working Papers, Research Seminar in International Economics, University of Michigan 412, Research Seminar in International Economics, University of Michigan.
  8. Sweeney, Richard J., 1997. "Do central banks lose on foreign-exchange intervention? A review article," Journal of Banking & Finance, Elsevier, Elsevier, vol. 21(11-12), pages 1667-1684, December.
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  14. Dominguez, Kathryn M & Frankel, Jeffrey A, 1993. "Does Foreign-Exchange Intervention Matter? The Portfolio Effect," American Economic Review, American Economic Association, American Economic Association, vol. 83(5), pages 1356-69, December.
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  24. Baillie, Richard T. & Osterberg, William P., 1997. "Why do central banks intervene?," Journal of International Money and Finance, Elsevier, Elsevier, vol. 16(6), pages 909-919, December.
  25. John B. Carlson & Jean M. McIntire & James B. Thomson, 1995. "Federal funds futures as an indicator of future monetary policy: a primer," Economic Review, Federal Reserve Bank of Cleveland, Federal Reserve Bank of Cleveland, issue Q I, pages 20-30.
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  27. Hung, Juann H, 1997. "Intervention strategies and exchange rate volatility: a noise trading perspective," Journal of International Money and Finance, Elsevier, Elsevier, vol. 16(5), pages 779-793, September.
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Cited by:
  1. Jorge Iván Canales Kriljenko, 2003. "Foreign Exchange Intervention in Developing and Transition Economies," IMF Working Papers 03/95, International Monetary Fund.

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