Intervention Policy of the BoJ: a Unified Approach

Michel Beine, Oscar Bernal, Jean-Yves Gnabo and Christelle Lecourt

LSF Research Working Paper Series from Luxembourg School of Finance, University of Luxembourg

Abstract: Intervening in the FX market implies a complex decision process for central banks. Monetary authorities have to decide whether to intervene or not, and if so, when and how. Since the successive steps of this procedure are likely to be highly interdependent, we adopt a nested logit approach to capture their relationships and to characterize the prominent features of the various steps of the intervention decision. Our findings shed some light on the determinants of central bank interventions, on the so-called secrecy puzzle and on the identification of the variables influencing the detection of foreign exchange transactions by market traders.

Keywords: FX intervention; Secrecy Puzzle; Market Detection; Nested Logit. (search for similar items in EconPapers)
JEL-codes: E58 F31 G15 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (27)

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Related works:
Journal Article: Intervention policy of the BoJ: A unified approach (2009)
Working Paper: Intervention Policy of the BoJ: A Unified Approach (2007)
Working Paper: Intervention Policy of the BoJ: a Unified Approach (2007)
Working Paper: Intervention policy of the BoJ: a unified approach (2006)
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