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Impact of Central Bank Intervention during Periods of Speculative Pressure: Evidence from the European Monetary System
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Helmut Stix
Published/Copyright:
November 30, 2019
Abstract
This paper studies the effects of Banco de Espanna and Banque de France interventions during the 1992-93 European Monetary System crises. In particular, a Markov Switching model is estimated where interventions influence the probabilities of transition between a calm and a turbulent regime. Furthermore, we analyze the impact of intervention on the expected rate of realignment. On balance, the results are consistent with the view that publicly known interventions but not secret interventions increased both the probability of switching to the turbulent regime as well as the expected realignment rate.
Published Online: 2019-11-30
Published in Print: 2007-08-01
© 2019 by Walter de Gruyter Berlin/Boston
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Articles in the same Issue
- Currency Crises, Monetary Policy and Corporate Balance Sheets
- German Exchange Rate Exposure at DAX and Aggregate Levels, International Trade and the Role of Exchange Rate Adjustment Costs
- Using Taylor Rules to Understand European Central Bank Monetary Policy
- Impact of Central Bank Intervention during Periods of Speculative Pressure: Evidence from the European Monetary System
- Asymmetric Information and the Transmission Mechanism of Monetary Policy
Articles in the same Issue
- Currency Crises, Monetary Policy and Corporate Balance Sheets
- German Exchange Rate Exposure at DAX and Aggregate Levels, International Trade and the Role of Exchange Rate Adjustment Costs
- Using Taylor Rules to Understand European Central Bank Monetary Policy
- Impact of Central Bank Intervention during Periods of Speculative Pressure: Evidence from the European Monetary System
- Asymmetric Information and the Transmission Mechanism of Monetary Policy
