publication . Preprint . 2011

On the evolution of U.S. foreign-exchange-market intervention: thesis, theory, and institutions

Michael D. Bordo; Owen F. Humpage; Anna J. Schwartz;
Open Access
  • Published: 01 Jan 2011
Abstract
Attitudes about foreign-exchange-market intervention in the United States evolved in tandem with views about monetary policy as policy makers grappled with the perennial problem of having more economic objectives than independent instruments with which to achieve them. This paper—the introductory chapter to our history of U.S. foreign exchange market intervention—explains this thesis and summarizes our conclusion: The Federal Reserve abandoned frequent foreign-exchange-market intervention because, rather than providing a solution to the instruments-versus-objectives problem, it interfered with the Federal Reserve’s ability to credibly commit to low and stable in...
Subjects
free text keywords: Foreign exchange market ; Monetary policy - United States
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