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A Generalization and Assessment of the Index of Managed Float


  • John T. Cuddington


The large literature on the optimum intensity of foreign exchange market intervention contains two alternative characterizations of the central bank's policy choice variable: (1) the central bank's intensity of intervention in the foreign exchange mar ket and (2) the Frenkel-Aizenman (1982) index of managed float. J. T. Cuddington (1991) has shown the relation between these policy measur es by deriving the Frenkel-Aizenman index from a standard specification of money market equilibrium. Here, the Frenkel-Aizenman index is generalized to cover situations where both sterilized and unsteriliz ed intervention are possible.

Suggested Citation

  • John T. Cuddington, 1993. "A Generalization and Assessment of the Index of Managed Float," Canadian Journal of Economics, Canadian Economics Association, vol. 26(1), pages 235-240, February.
  • Handle: RePEc:cje:issued:v:26:y:1993:i:1:p:235-40

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    References listed on IDEAS

    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Joel Fried, 1980. "The Intergenerational Distribution of the Gains from Technical Change and from International Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 13(1), pages 65-81, February.
    3. Kareken, John & Wallace, Neil, 1977. "Portfolio autarky: A welfare analysis," Journal of International Economics, Elsevier, vol. 7(1), pages 19-43, February.
    4. Starrett, David A, 1972. "On Golden Rules, the "Biological Theory of Interest," and Competitive Inefficiency," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 276-291, March-Apr.
    5. Dornbusch, Rudiger, 1985. "Intergenerational and international trade," Journal of International Economics, Elsevier, vol. 18(1-2), pages 123-139, February.
    6. Krugman, Paul R, 1987. "Is Free Trade Passe?," Journal of Economic Perspectives, American Economic Association, vol. 1(2), pages 131-144, Fall.
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    Cited by:

    1. Weymark, Diana N, 1997. "Measuring the degree of exchange market intervention in a small open economy," Journal of International Money and Finance, Elsevier, vol. 16(1), pages 55-79, February.
    2. Glick, Reuven & Hutchison, Michael M., 2000. "Foreign reserve and money dynamics with asset portfolio adjustment: international evidence," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 10(3-4), pages 229-247, December.

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