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BL
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| Record Number
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749271
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| Doc. No
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b569229
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| Main Entry
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Silke Fabian.
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| Title & Author
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Exchange rate management in interdependent economies : : from Williamsburg to Louvre\ Silke Fabian.
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| Publication Statement
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Heidelberg : Physica-Verlag, ©1993.
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| Series Statement
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Schriftenreihe Handeln und Entscheiden in komplexen ökonomischen Situationen, Bd. 9.
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| Page. NO
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(xviii, 172 pages) : illustrations
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| ISBN
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3642500293
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: 9783642500299
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| Contents
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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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| Abstract
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The theoretical part of this book analyzes non-cooperative and cooperative 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 centralbank credibility problems (towards the private sector and other countries) cannot be eliminated. While this reduces the effectiveness of central bank signals, this also motivates the use of costly interventions as opposed to mere policy announcements. Secondly, the introduction of non-rational expectations allows to account for the differing successes of actual centralbank intervention operations. The empirical part investigates whether Bundesbank interventions in the US dollar market between 1983-87actually served as signals of future changes in the monetary base. By using several alternative models of expectation formation the study cannot uncoverany favorable evidence for this hypothesis. Strikingly, this result emerges for both unilateral and coordinated intervention policies.
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| Subject
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Foreign exchange administration -- Mathematical models.
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| Subject
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Monetary policy -- Mathematical models.
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| LC Classification
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HG3823.S555 1993
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| Added Entry
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Silke Fabian
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