Journal Article

On the rotation of the earth, drunken sailors, and exchange rate policy

Abstract: A growing number of observers seem to believe that official foreign exchange intervention offers a useful tool for managing the dollar?s descent. In particular situations, official transactions can sometimes produce temporary changes in exchange rates, but intervention does not permit countries to avoid or substantially modify trends in the movements of their exchange rates. At best, intervention is of very limited value.

Keywords: Monetary policy; Foreign exchange administration;

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2004

Issue: Feb

Order Number: 2