An analysis of the forecast value of U.S. interventions in the foreign exchange market over the past seven years, which finds that official transactions by U.S. monetary authorities generally did not seem to improve the efficiency with which the foreign exchange market obtained information...

A review of three channels through which central bank intervention could alter exchange rates, concluding that sterilized intervention is a very limited policy tool.

Research has generally failed to find reliable connections between official exchange-market interventions and exchange rates that are consistent with either a monetary or a portfolio-balance theory of exchange-rate determination. Recently economists have suggested that intervention might...

An examination of the Federal Reserve's intervention successes in the late 1980s, showing that, although the characteristic day-to-day fluctuations in exchange rates virtually ensured that a large share of these interventions would appear successful--purely by chance and even in the absence of a...

An argument that for countries with well-developed money markets and flexible exchange rates, there is little to be gained from holding a vast foreign exchange portfolio and intervening in the world's currency markets.

A discussion of three channels through which U.S. intervention policy could theoretically influence the foreign-exchange market: the monetary channel, the portfolio-adjustment channel, and the expectations channel.

U.S. exchange-market intervention has no apparent effect on market fundamentals but may influence expectations. If intervention can accurately forecast exchange-rate movements, knowledge that the Federal Reserve is trading can alter traders' prior estimates of the distribution of exchange-rate...

A study showing that the number of observed intervention successes over the February 1987 to February 1990 period was greater than one would expect to see randomly, and that the probability of success increased when intervention was coordinated and when the dollar amount was large.

Currency markets have witnessed a sharp increase in government intervention since 1985. Many observers believe that this intervention promoted the dollar's depreciation between 1985 and early 1987, and that intervention has since helped to stabilize dollar exchange rates. This paper tests for a...

Germany, Japan, and the United States continue to view foreign exchange intervention as an effective instrument, although the mechanism through which it operates is unclear. In this paper, we use official data on daily dollar intervention to examine its impact on exchange-rate risk premia...