A study of U.S. intervention in the foreign exchange market between 1984 and 1987, concluding that exchange-rate stability among nations depends on fundamental macroeconomic policies, not intervention.

Foreign-exchange-market intervention is generally ineffective when undertaken independent of monetary policy. But when undertaken as a goal of monetary policy, exchange-rate management can compromise price stability. This Economic Commentary explains the difficulties of implementing an...

An argument that despite complaints about the persistent U.S.-Japanese trade imbalance, enacting policies to restrict Japan's access to our markets will have few lasting effects on either country's overall trade balance, and that trade imbalances are instead appropriate reflections of domestic...

An examination of causality between dollar exchange-rate movements and U.S. price levels as described by the relative purchasing power parity theory, with a discussion of channels of price pressure and of the Hooper-Lowrey method of estimating future trends of the dollar.

An analysis of the U.S. trade deficit, featuring an evaluation of the effectiveness of America's effort to correct the deficit by promoting dollar depreciation and by encouraging the growth of foreign economies.

We recently invited four international economists to the Federal Reserve Bank of Cleveland to discuss global developments and to help us identify and understand the key international risks that these developments present for U.S. monetary policy. This Commentary develops a key macroeconomic...

Analysts caution that rapid foreign economic growth could induce a depreciation of the dollar, as international investors diversify their portfolios in favor of higher returns abroad. Although we cannot establish a simple relationship between foreign growth and the dollar, we can conclude that...

A look at the pros and cons of replacing Mexico's central bank with a currency board, explaining that although a currency board would eliminate monetary policy discretion and help to restore faith in the peso's purchasing power, it would also prevent exchange-rate changes from aiding economic...

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.

A look at whether the United States' decision to cease intervention after March 1981 had a perceptible influence on the day-to-day behavior of exchange rates, using the stable paretian distribution.