Official Intervention in the Foreign Exchange Market: Is it Effective, and, If so, How Does it Work?

By Lucio Sarno, Mark P. Taylor. 2001

788 citations recorded by the source corpus.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/7c86c8984c2c1e94b39c1b61241bb1ca46623d7c

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Citations in the corpus

Effectiveness of Official Daily Foreign Exchange Market Intervention Operations in Japan (2003, background): “However, empirical support for the effectiveness of intervention, usually based on Bundesbank and Fed intervention, is mixed (see Dominguez and Frankel, 1993, and Sarno and Taylor, 2001, for a recent survey of the literature).”
Central Bank Communication on Financial Stability (2014, positive): “The mechanism by which the central bank affects financial markets seems to be related to the notion of a co-ordination channel, whereby communication by the central bank works as a co-ordination device, thereby reducing heterogeneity in expectations and information, and thus inducing asset prices to”
Communication and Exchange Rate Policy (2008, background): “Actual 1 Sarno and Taylor (2001) and Edison (1993) provide comprehensive surveys and assessments of the literature on actual interventions in the 1980s and 1990s.”
The International Role of the Euro (2002, neutral): “46 However, the impact of official diversification may be amplified by a signalling or coordination channel, following the model of Sarno and Taylor (2001). Statements (or even rumours) by emerging market authorities about a possible diversification of their reserve holdings in the future may indeed”
Monetary Policy Rules, Asset Prices, and Exchange Rates (2003, neutral): “…exchange rates, but they do not want to admit it—for example, the case of foreign exchange intervention operations , which are often secret even though standard theory suggests that official intervention in the foreign exchange market is (more) effective if it is announced (Sarno and Taylor, 2001).”
China's Dominance Hypothesis and the Emergence of a Tri-Polar Global Currency System (2014, neutral): “The effect of official statements may also occur through a coordination channel (Sarno and Taylor, 2001) as they may trigger and help coordinate expectations among market participants.”
Two Targets, Two Instruments: Monetary and Exchange Rate Policies in Emerging Market Economies (2012, background): “…intervention in advanced economies generally concludes that the portfolio balance channel is unlikely to be effective because of the magnitude of outstanding assets dwarfs plausible amounts of intervention (Ghosh, 1992; see also Sarno and Taylor, 2001 for a survey, and BIS Paper no. 24, 2005).”
Talking heads : the effects of ECB statements on the euro-dollar exchange rate (2005, background): “See Sarno and Taylor (2001) for a review of the literature on foreign exchange interventions.”
The Effectiveness of Foreign Exchange Intervention in Emerging Market Countries: Evidence from the Czech Koruna (2007, neutral): “A survey of empirical studies on the determinants of intervention can be found in Almekinders (1995) and Sarno and Taylor (2001).”
Real exchange rates and Purchasing Power Parity: mean-reversion in economic thought (2006, background): “A third potential source of nonlinearity, suggested by Sarno and Taylor ( 2001 ) and Taylor ( 2004 2005 ) arises from the influence of official intervention in the foreign exchange market.”
The Empirics of Foreign Exchange Intervention in Emerging Market Countries: The Cases of Mexico and Turkey (2004, neutral): “See Edison (1993) and Sarno and Taylor (2001) for excellent surveys of methodologies used and the empirical evidence on the effectiveness of intervention.”