Exchange rate target zone models postulate that `in the absence of intervention' exchange rates are driven by their …. The possibility of policy intervention in foreign exchange markets, however, may lead to stochastic process switching: in … intervention may add to these stabilizing effects. On the other hand, in target zones which are imperfectly credible, policy …

exchange rate variability and intervention across countries. But OCA considerations affect exchange market pressures and … intervention in different ways. Exchange market pressures mainly reflect asymmetric shocks, while intervention largely reflects the …). Intervention and exchange market pressure also vary with the structure of the international monetary system. …