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Foreign exchange intervention and the political business cycle : a panel data analysis

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Foreign exchange intervention and the political business cycle : a panel data analysis

Dreher, Axel (contributor); Vaubel, Roland (contributor) - 2007

By combining expansionary open market operations with sales of foreign exchange, the central bank can expand the monetary base without depreciating the exchange rate. Thus, if there is a monetary political business cycle, sales of foreign exchange are especially likely before elections. Our...