Official Intervention in the Foreign Exchange Market: Is It Effective and, If So, How Does It Work?

Mark Taylor and Lucio Sarno

Journal of Economic Literature, 2001, vol. 39, issue 3, 839-868

Abstract: Our paper assesses progress made by the profession in understanding whether and how exchange rate intervention works. We review theory and evidence on official intervention, concentrating primarily on work published in the last decade or so. We conclude that, unlike the profession's consensus of the 1980s, official intervention can be effective, especially as a signal of policy intentions and when publicly announced and concerted. We note an apparent empirical puzzle concerning the secrecy of much intervention and suggest another way for intervention to be effective which has received little attention in the literature, namely by remedying a coordination failure in the foreign exchange market.

JEL-codes: F31 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/jel.39.3.839
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (647)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jel.39.3.839 (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Official Intervention in the Foreign Exchange Market: Is It Effective, and, If So, How Does It Work? (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jeclit:v:39:y:2001:i:3:p:839-868

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

Journal of Economic Literature is currently edited by Steven Durlauf

More articles in Journal of Economic Literature from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().