Search Results
Journal Article
Intervention and the dollar
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.
Working Paper
Sterilized intervention, nonsterilized intervention, and monetary policy
Sterilized intervention is generally ineffective. Countries that conduct monetary policy using an overnight, interbank rate as an intermediate target automatically sterilize their interventions. Nonsterilized interventions can influence nominal exchange rates, but they conflict with price stability unless the underlying shocks prompting them are domestic in origin and monetary in nature. Nonsterilized interventions, however, are unnecessary since standard open-market operations can achieve the same result.
Journal Article
Global risks to U.S. monetary policy
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 concern that emerged from our conversations.
Journal Article
Rising relative prices or inflation: why knowing the difference matters
Almost everyone uses the word inflation to refer to any increase in prices, but it ought to be reserved for a just one kind of price increase. True inflation has a different cause?and a different cure?than the price increases of goods and services caused by constantly changing supply and demand conditions. The Federal Reserve can and should act to control inflation, but when relative-price changes are putting pressure on businesses and consumers, the Fed can do little.
Journal Article
Do deficits matter?
An argument that despite ballooning federal debt levels, no proof exists that government budget deficits are related to interest rates or real exchange rates, and that the size and composition of the government's budget are at least as critical as the federal deficit in determining the nation's long-term economic growth.
Working Paper
U.S. intervention during the Bretton Wood Era:1962-1973
By the early 1960s, outstanding U.S. dollar liabilities began to exceed the U.S. gold stock, suggesting that the United States could not completely maintain its pledge to convert dollars into gold at the official price. This raised uncertainty about the Bretton Woods parity grid, and speculation seemed to grow. In response, the Federal Reserve instituted a series of swap lines to provide central banks with cover for unwanted, but temporary accumulations of dollars and to provide foreign central banks with dollar funds to finance their own interventions. The Treasury also began intervening in ...
Journal Article
The dollar in the eighties
An analysis of exchange-rate patterns and a discussion of factors thought to influence the strength of the dollar in the foreign exchange market.
Journal Article
Monetary policy and real economic growth
An examination of the connections between monetary policy changes, shifts in aggregate spending, and adjustments to production, showing that although a central bank may periodically exploit the connection between short-term monetary expansions and real economic growth, frequent attempts may ultimately distort the allocation of resources from productive uses to protective enterprises and result in proportionally higher inflation.
Journal Article
A critique of monetary protectionism
An argument against attempts to achieve current-account objectives through monetary manipulation of nominal exchange rates, with an explanation of why such tampering--which for various reasons might appear politically attractive--ultimately harms economic welfare.