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Epilogue: Foreign-Exchange-Market Operations in the Twenty-First Century

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  • Michael D. Bordo
  • Owen Humpage
  • Anna J. Schwartz

Abstract

Foreign-exchange operations did not end after the United States stopped its activist approach to intervention. Japan persisted in such operations, but avoided overt conflict with its monetary policy. With the on-set of the Great Recession, Switzerland has transacted in foreign exchange both for monetary and exchange-rate purposes, and key central banks have used swap facilities to extended their lender-of-last-resort functions. Developing and emerging market economies continue to intervene, but their actions may hamper the development of their own foreign-exchange markets. China's undervalued exchange rate is producing inflation and real appreciation, despite China's efforts to sterilize its reserve accumulation.

Suggested Citation

  • Michael D. Bordo & Owen Humpage & Anna J. Schwartz, 2012. "Epilogue: Foreign-Exchange-Market Operations in the Twenty-First Century," NBER Working Papers 17984, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17984
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    References listed on IDEAS

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    1. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 379-408.
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    3. Humpage, Owen F, 1999. "U.S. Intervention: Assessing the Probability of Success," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(4), pages 731-747, November.
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    6. Raphael Auer & Sébastien Kraenzlin, 2011. "International liquidity provision during the financial crisis: a view from Switzerland," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 409-418.
    7. William Allen & Richhild Moessner, 2010. "Central bank co-operation and international liquidity in the financial crisis of 2008-9," BIS Working Papers 310, Bank for International Settlements.
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    11. Ito, Takatoshi & Yabu, Tomoyoshi, 2007. "What prompts Japan to intervene in the Forex market? A new approach to a reaction function," Journal of International Money and Finance, Elsevier, vol. 26(2), pages 193-212, March.
    12. William A. Allen & Richhild Moessner, 2010. "Central Bank co-operation and International liquidity in the financial crisis of 2008-09," FMG Special Papers sp187, Financial Markets Group.
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    15. Bonser-Neal, Catherine & Roley, V Vance & Sellon, Gordon H, Jr, 1998. "Monetary Policy Actions, Intervention, and Exchange Rates: A Reexamination of the Empirical Relationships Using Federal Funds Rate Target Data," The Journal of Business, University of Chicago Press, vol. 71(2), pages 147-177, April.
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    Cited by:

    1. Costantini, Mauro & Cuaresma, Jesus Crespo & Hlouskova, Jaroslava, 2014. "Can Macroeconomists Get Rich Forecasting Exchange Rates?," Economics Series 305, Institute for Advanced Studies.
    2. Pablo Pincheira, 2013. "Interventions and Inflation Expectations in an Inflation Targeting Economy," Working Papers Central Bank of Chile 693, Central Bank of Chile.
    3. Juan Marchetti & Michele Ruta & Robert Teh, 2012. "Trade Imbalances and Multilateral Trade Cooperation," CESifo Working Paper Series 4050, CESifo Group Munich.
    4. Broz, Lawrence, 2015. "The Federal Reserve as global lender of last resort, 2007-2010," LSE Research Online Documents on Economics 60951, London School of Economics and Political Science, LSE Library.
    5. repec:eee:reveco:v:51:y:2017:i:c:p:370-390 is not listed on IDEAS
    6. Ronald McDonald & Xuxin Mao, 2016. "Japan's Currency Intervention Regimes: A Microstructural Analysis with Speculation and Sentiment," Working Papers 2016_06, Business School - Economics, University of Glasgow.
    7. George S. Tavlas, 2013. "Anna Jacobson Schwartz: In Memoriam," Cato Journal, Cato Journal, Cato Institute, vol. 33(3), pages 321-332, Fall.
    8. Tervala, Juha, 2014. "China, the Dollar Peg and U.S. Monetary Policy," MPRA Paper 53223, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • N2 - Economic History - - Financial Markets and Institutions

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