On the rotation of the earth, drunken sailors, and exchange rate policy

Owen Humpage

Economic Commentary, 2004, issue Feb

Abstract: A growing number of observers seem to believe that official foreign exchange intervention offers a useful tool for managing the dollar?s descent. In particular situations, official transactions can sometimes produce temporary changes in exchange rates, but intervention does not permit countries to avoid or substantially modify trends in the movements of their exchange rates. At best, intervention is of very limited value.

Keywords: Monetary policy; Foreign exchange administration (search for similar items in EconPapers)
Date: 2004
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