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credibility with markets, the costs to the broader economy of defending an exchange-rate peg can be very high. The dynamic … interplay between credibility and commitment is illustrated by the 1992 Swedish and British crises and the 1994-95 Mexican …
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credibility with markets, the costs to the broader economy of defending an exchange-rate peg can be very high. The dynamic … interplay between credibility and commitment is illustrated by the 1992 Swedish and British crises and the 1994-95 Mexican …
Persistent link: https://www.econbiz.de/10012473688
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When the goals of internal and external macroeconomic equilibrium are in conflict, sterilized intervention in the foreign exchange market may provide an independent policy instrument through which the central bank can resolve its dilemma in the short run. This paper is concerned with the West...
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