Foreign exchange intervention: how to signal policy objectives and stabilise the economy

• 成果类型: Article
• 署名作者: Vitale, P
• 署名单位: University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(03)00039-4
• 发表日期: 2003
• 页码: 841-870
• 关键词: foreign exchange intervention; monetary policy; costly signalling

摘要

Within a simple model of monetary policy for an open economy, we study how foreign exchange intervention may be used as a costly signal of the policy makers' objectives. Our analysis indicates that: (i) foreign exchange intervention typically stabilises the national economy, reducing the fluctuations of employment and output; (ii) this result is sensitive to the institutional structure of decision-making, in that a larger stability gain is obtained when foreign exchange intervention and monetary policy are kept under the jurisdiction of different governmental agencies. (C) 2003 Elsevier Science B.V. All rights reserved.