The Revived Bretton Woods System: The Effects of Periphery Intervention and Reserve Management on Interest Rates & Exchange Rates in Center Countries
11 Pages Posted: 12 Mar 2004 Last revised: 27 Mar 2022
Date Written: March 2004
Abstract
In this paper we explore some implications of the revived' Bretton Woods system for exchange market intervention and reserve management in periphery countries. Financial policies in these countries are seen as a component of a more general portfolio management policy in which the formation of an efficient domestic capital stock is a key objective. Because intervention in financial markets is an important part of their development strategy, intervention in exchange and financial markets has, and we argue will continue to be, large and persistent enough to generate predictable deviations of exchange rates and relative yields in industrial country financial markets from normal cyclical patterns. We argue that management of the currency composition of international reserves by emerging market governments and central banks is unlikely to alter these conclusions.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Emergence of the Euro as an International Currency
By Richard Portes and Hélène Rey
-
European Financial Markets after Emu: A First Assessment
By Jean-pierre Danthine, Francesco Giavazzi, ...
-
The Euro Area Financial System: Structure, Integration and Policy Initiatives
By Philipp Hartmann, Angela Maddaloni, ...
-
The Currency Composition of Foreign Exchange Reserves: Retrospect and Prospect
-
The Cost of Barriers to Entry: Evidence from the Market for Corporate Euro Bond Underwriting
-
The Euro and International Capital Markets
By Carsten Detken and Philipp Hartmann