Skip to main content Skip to main content
SHARE   Share on Twitter Share on Facebook Share on LinkedIn Email

Identifying the Effects of U.S. Intervention on the Levels of Exchange Rates

Most intervention studies have been silent on the assumed structure of the economic system—implicitly imposing implausible assumptions—despite the fact that inference depends crucially on such issues. This paper identifies the cross-effects of intervention and the level of exchange rates using the likely timing of intervention, macroeconomic announcements as instruments and the nonlinear structure of the intervention reaction function. Proper identification of the effects of intervention indicates that it effectively changes the levels of exchange rates. Such inference depends on careful attention to nonlinearity and seemingly innocuous identification assumptions.

Read Full Text

Subscribe to our newsletter

Follow us

Twitter logo Google Plus logo Facebook logo YouTube logo LinkedIn logo
Back to Top