On The Evolution Of U.S. Foreign-Exchange-Market Intervention: Thesis, Theory, And Institutions

Attitudes about foreign-exchange-market intervention in the United States evolved in tandem with views about monetary policy as policy makers grappled with the perennial problem of having more economic objectives than independent instruments with which to achieve them. This paper - the introductory chapter to the history of U.S. foreign exchange market intervention - explains this paper and summarizes the conclusion: The Federal Reserve abandoned frequent foreign-exchange-market intervention because, rather than providing a solution to the instruments-versus-objectives problem, it interfered with the Federal Reserve's ability to credibly commit to low and stable inflation.

Provided by: Federal Reserve Bank of Cleveland Topic: Big Data Date Added: Jun 2011 Format: PDF

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