Overview

The theoretical part of this book analyzes non-co-operative and co-operative policies of exchange rate management within a formal two-country, game-theoretic framework, where interventions are fully neutralized and signal future changes in monetary policy. This analysis incorporates two novel factors crucial for understanding real-world intervention experience: partial credibility and non-rational expectations. In contrast to traditional models of the repeated games literature where reputational effects establish full credibility, in the theory presented here central bank credibility problems (towards the private sector and other countries) cannot be eliminated. The empirical section of the study investigates whether Bundesbank interventions in the US dollar market between 1983-87 actually served as signals of future changes in the monetary base. By using several alternative models of expectation formation, the study cannot uncover any favourable evidence for this hypothesis. Strikingly, this result emerges for both unilateral and co-ordinated intervention policies.

Full Product Details

Author:   Silke Fabian
Publisher:   Springer-Verlag Berlin and Heidelberg GmbH & Co. KG
Imprint:   Physica-Verlag GmbH & Co
Edition:   Softcover reprint of the original 1st ed. 1993
Volume:   9
Weight:   0.314kg
ISBN:  

9783790807295

ISBN 10:   379080729
Pages:   172
Publication Date:   29 November 1993
Audience:   College/higher education ,  Professional and scholarly ,  Postgraduate, Research & Scholarly ,  Professional & Vocational
Format:   Paperback
Publisher's Status:   Active
Availability:   Out of stock  
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Table of Contents

I Official Central Bank Interventions.- 1 Effectiveness of Foreign Exchange Market Interventions.- 2 A Signalling Model of Interventions.- Summary of Part I.- II International Exchange Rate Management.- 3 Non-Cooperative Intervention Policies.- 4 International Central Bank Cooperation.- 5 The International Prisoner’s Dilemma.- Summary of Part II.- III Empirical Analysis.- Overview.- 6 Did Bundesbank Interventions serve as Signals of Monetary Policy?.- Summary of Part III.- Data Appendix.- Discussion and Concluding Summary.- References.

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