Is Official Exchange Rate Intervention Effective?
I examine the effectiveness of exchange rate intervention within the context of a Markov-switching model for the real exchange rate. The probability of switching between stable and unstable regimes depends nonlinearly upon the amount of intervention, the degree of misalignment and the duration of th...
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| Veröffentlicht in: | Economica (London) 2004-02, Vol.71 (281), p.1-11 |
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| creator | Taylor, Mark P. |
| description | I examine the effectiveness of exchange rate intervention within the context of a Markov-switching model for the real exchange rate. The probability of switching between stable and unstable regimes depends nonlinearly upon the amount of intervention, the degree of misalignment and the duration of the regime. Applying this to dollar-mark data for the period 1985-98, I find that intervention increases the probability of stability when the rate is misaligned, and that its influence grows with the degree of misalignment. However, intervention within a small neighbourhood of equilibrium will result in a greater probability of instability. |
| doi_str_mv | 10.1111/j.0013-0427.2004.00354.x |
| format | Article |
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The probability of switching between stable and unstable regimes depends nonlinearly upon the amount of intervention, the degree of misalignment and the duration of the regime. Applying this to dollar-mark data for the period 1985-98, I find that intervention increases the probability of stability when the rate is misaligned, and that its influence grows with the degree of misalignment. However, intervention within a small neighbourhood of equilibrium will result in a greater probability of instability.</description><identifier>ISSN: 0013-0427</identifier><identifier>EISSN: 1468-0335</identifier><identifier>DOI: 10.1111/j.0013-0427.2004.00354.x</identifier><language>eng</language><publisher>Oxford, UK: Blackwell Publishing</publisher><subject>Economic models ; Economic stability ; Economic theory ; Economics ; Equilibrium ; Equilibrium exchange rates ; Exchange rates ; Foreign exchange markets ; Foreign exchange rates ; Interventionism ; Logarithms ; Market equilibrium ; Markov analysis ; Markovian processes ; Monetary policy ; Nonlinearity ; Politics ; Probability ; Real exchange rates ; Studies ; Transition probabilities</subject><ispartof>Economica (London), 2004-02, Vol.71 (281), p.1-11</ispartof><rights>Copyright 2004 The London School of Economics and Political Science</rights><rights>Copyright Blackwell Publishers Feb 2004</rights><lds50>peer_reviewed</lds50><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c6064-5e71f1d8f824f182f0aaa1872f71d32087daa1eb1f2819445fc571ab2d1cbedc3</citedby><cites>FETCH-LOGICAL-c6064-5e71f1d8f824f182f0aaa1872f71d32087daa1eb1f2819445fc571ab2d1cbedc3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://www.jstor.org/stable/pdf/3549165$$EPDF$$P50$$Gjstor$$H</linktopdf><linktohtml>$$Uhttps://www.jstor.org/stable/3549165$$EHTML$$P50$$Gjstor$$H</linktohtml><link.rule.ids>314,776,780,799,1411,27843,27901,27902,45550,45551,57992,58225</link.rule.ids></links><search><creatorcontrib>Taylor, Mark P.</creatorcontrib><title>Is Official Exchange Rate Intervention Effective?</title><title>Economica (London)</title><description>I examine the effectiveness of exchange rate intervention within the context of a Markov-switching model for the real exchange rate. 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However, intervention within a small neighbourhood of equilibrium will result in a greater probability of instability.</description><subject>Economic models</subject><subject>Economic stability</subject><subject>Economic theory</subject><subject>Economics</subject><subject>Equilibrium</subject><subject>Equilibrium exchange rates</subject><subject>Exchange rates</subject><subject>Foreign exchange markets</subject><subject>Foreign exchange rates</subject><subject>Interventionism</subject><subject>Logarithms</subject><subject>Market equilibrium</subject><subject>Markov analysis</subject><subject>Markovian processes</subject><subject>Monetary policy</subject><subject>Nonlinearity</subject><subject>Politics</subject><subject>Probability</subject><subject>Real exchange rates</subject><subject>Studies</subject><subject>Transition probabilities</subject><issn>0013-0427</issn><issn>1468-0335</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2004</creationdate><recordtype>article</recordtype><sourceid>7TQ</sourceid><recordid>eNqNkMtKxDAUhoMoOF7ewEVx4a5jrk26EJFh1BFREG-4OWTSRFtrOyYdHd_ejJVZuPJsksP_fyF8CCUED0mcw2qIMWEp5lQOKcY8rkzw4WINDQjPVIoZE-tosCptoq0QKhxHUDlAZBKSa-dKU-o6GS_Mi26ebXKjO5tMms76D9t0ZdskY-es6coPe7yDNpyug939PbfR3en4dnSeXl6fTUYnl6nJcMZTYSVxpFBOUe6Iog5rrYmS1ElSMIqVLOJup8RRRXLOhTNCEj2lBTFTWxi2jQ76d2e-fZ_b0MFbGYyta93Ydh6ASZXxPMexuP-nWLVz38S_AWUil5jjLJZUXzK-DcFbBzNfvmn_BQTDUiRUsHQES0ewFAk_ImER0aMe_Sxr-_VvDsaj0Um8RX6v56vQtX7FxygnmYhx2sdl6OxiFWv_CplkUsDD1RncP4qn7P7iCs7ZNzC-j90</recordid><startdate>200402</startdate><enddate>200402</enddate><creator>Taylor, Mark P.</creator><general>Blackwell Publishing</general><general>London School of Economics and Political Science</general><general>Blackwell Publishing Ltd</general><scope>BSCLL</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>7TQ</scope><scope>8BJ</scope><scope>DHY</scope><scope>DON</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>200402</creationdate><title>Is Official Exchange Rate Intervention Effective?</title><author>Taylor, Mark P.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c6064-5e71f1d8f824f182f0aaa1872f71d32087daa1eb1f2819445fc571ab2d1cbedc3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2004</creationdate><topic>Economic models</topic><topic>Economic stability</topic><topic>Economic theory</topic><topic>Economics</topic><topic>Equilibrium</topic><topic>Equilibrium exchange rates</topic><topic>Exchange rates</topic><topic>Foreign exchange markets</topic><topic>Foreign exchange rates</topic><topic>Interventionism</topic><topic>Logarithms</topic><topic>Market equilibrium</topic><topic>Markov analysis</topic><topic>Markovian processes</topic><topic>Monetary policy</topic><topic>Nonlinearity</topic><topic>Politics</topic><topic>Probability</topic><topic>Real exchange rates</topic><topic>Studies</topic><topic>Transition probabilities</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Taylor, Mark P.</creatorcontrib><collection>Istex</collection><collection>CrossRef</collection><collection>PAIS Index</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>PAIS International</collection><collection>PAIS International (Ovid)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Economica (London)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Taylor, Mark P.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Is Official Exchange Rate Intervention Effective?</atitle><jtitle>Economica (London)</jtitle><date>2004-02</date><risdate>2004</risdate><volume>71</volume><issue>281</issue><spage>1</spage><epage>11</epage><pages>1-11</pages><issn>0013-0427</issn><eissn>1468-0335</eissn><abstract>I examine the effectiveness of exchange rate intervention within the context of a Markov-switching model for the real exchange rate. The probability of switching between stable and unstable regimes depends nonlinearly upon the amount of intervention, the degree of misalignment and the duration of the regime. Applying this to dollar-mark data for the period 1985-98, I find that intervention increases the probability of stability when the rate is misaligned, and that its influence grows with the degree of misalignment. However, intervention within a small neighbourhood of equilibrium will result in a greater probability of instability.</abstract><cop>Oxford, UK</cop><pub>Blackwell Publishing</pub><doi>10.1111/j.0013-0427.2004.00354.x</doi><tpages>11</tpages><oa>free_for_read</oa></addata></record> |
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| ispartof | Economica (London), 2004-02, Vol.71 (281), p.1-11 |
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| source | Jstor Complete Legacy; Wiley Online Library Journals Frontfile Complete; PAIS Index; Business Source Complete |
| subjects | Economic models Economic stability Economic theory Economics Equilibrium Equilibrium exchange rates Exchange rates Foreign exchange markets Foreign exchange rates Interventionism Logarithms Market equilibrium Markov analysis Markovian processes Monetary policy Nonlinearity Politics Probability Real exchange rates Studies Transition probabilities |
| title | Is Official Exchange Rate Intervention Effective? |
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