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Does Asian foreign exchange intervention really hurt Europe? Lessons from a three-asset portfolio model

Author

Listed:
  • Sebastian Dullien

    (Financial Times Deutschland)

Abstract

In the current policy debate, it is often argued that foreign exchange interventions by Asian central banks lead to an excessive appreciation of the euro against the dollar. This paper shows that in a three asset portfolio model the opposite holds: Interventions by Japan's central bank strenghten the dollar against the euro.

Suggested Citation

  • Sebastian Dullien, 2005. "Does Asian foreign exchange intervention really hurt Europe? Lessons from a three-asset portfolio model," International Finance 0502010, EconWPA.
  • Handle: RePEc:wpa:wuwpif:0502010
    Note: Type of Document - pdf; pages: 10
    as

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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/if/papers/0502/0502010.pdf
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    References listed on IDEAS

    as
    1. Mark P. Taylor & Lucio Sarno, 2001. "Official Intervention in the Foreign Exchange Market: Is It Effective and, If So, How Does It Work?," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 839-868, September.
    2. repec:spr:sptbec:978-3-662-49862-0 is not listed on IDEAS
    3. Dominguez, Kathryn M & Frankel, Jeffrey A, 1993. "Does Foreign-Exchange Intervention Matter? The Portfolio Effect," American Economic Review, American Economic Association, vol. 83(5), pages 1356-1369, December.
    4. Giancarlo Gandolfo, 2016. "International Finance and Open-Economy Macroeconomics," Springer Texts in Business and Economics, Springer, edition 2, number 978-3-662-49862-0, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    China; Japan; foreign exchange interventions; portfolio model;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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