Foreign exchange intervention and international policy coordination
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Foreign exchange intervention and international policy coordination comparing the G-3 and EMS experience by Axel Weber

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Published by Centre for Economnic Policy Research in London .
Written in English


Book details:

Edition Notes

StatementAxel A. Weber.
SeriesDiscussion paper series / Centre for Economic Policy Research -- no. 1038, Discussion paper series -- no. 1038.
ContributionsCentre for Economic Policy Research.
ID Numbers
Open LibraryOL20672855M

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Using previously unavailable data on daily intervention by the US Federal Reserve and the German Bundesbank, the authors find to the contrary that even "sterilized" intervention can have an effect, especially if it is known to the markets. Implications are drawn for intervention policy and its role in the international coordination process. Get this from a library! Foreign exchange intervention and international policy coordination: comparing the G-3 and EMS experience. [Axel A Weber; Centre for Economic Policy .   A foreign exchange intervention is a monetary policy tool used by a central bank. When the central bank takes an active, participatory role .   Unexpected monetary policy and foreign exchange intervention induce liquidity shocks to the international financial markets, resulting in fluctuations in asset prices and changes in real activity. We now investigate the welfare implications of these liquidity shocks on the representative households of the two countries.

Currency intervention, also known as foreign exchange market intervention or currency manipulation, is a monetary policy operation. It occurs when a government or central bank buys or sells foreign currency in exchange for its own domestic currency, generally with the intention of influencing the exchange rate and trade policy.. Policymakers may intervene in foreign exchange markets in order. world interest rates, highlighting the importance of policy coordination. JEL codes: F31, F32, F41, F42 Keywords: Foreign Exchange Interventions; Limited Capital Mobility; Reserves; Coordina-tion 1 Introduction Foreign exchange interventions are among the most important macroeconomic policy tools, yet among the least understood. On the changing face of international relations and foreign policy, Ali Wayne, fellow at the RAND corporation, chooses his best books on the US’s increasingly challenged position in world affairs. Joseph Nye, former dean of Harvard’s Kennedy School, chooses his best books on . Description. International Economics, the best-selling textbook in the field, is written by two of the world's preeminent economists. Both the real trade portion of the book and the monetary portion are divided into a core of chapters focused on theory, followed by chapters applying the theory to major policy questions, past and current.

The premise of the paper is that the fervor for foreign exchange market intervention by U.S, and European monetary authorities has ebbed in recent years. A pattern of initial belief in the effectiveness of foreign exchange market intervention has recently been eroded, as is revealed by the absence of intervention in circumstances that in earlier times would have invoked it. In addition to foreign exchange intervention, the issue of international monetary policy coordination is discussed, again both within the G-3 and the EMS context. It is shown that the G-3 countries have relied primarily on coordinated intervention without any significant commitment to other forms of policy coordination in stabilizing exchange. The Effectiveness of Foreign- Exchange Intervention: Recent Experience, / Obstfeld, Maurice Can the European Monetary System be Copied Outside Europe? Lessons from Ten Years of Monetary Policy Coordination in Europe / Giavazzi, Francesco / Giovannini, Alberto   International Policy Coordination and Exchange Rate Fluctuations (National Bureau of Economic Research Conference Report) 1st Edition by William H. Branson (Editor), Jacob A. Frenkel (Editor), Morris Goldstein (Editor) & 0 more.