Announcements are not enough : foreign exchange intervention under imperfect credibility

Number: 
949
Published: 
Classification JEL: 
F31, E58, G20, D43
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

Central banks in emerging countries frequently build-up (diminish) reserves while attempting to depreciate (appreciate) their domestic currencies. Even if these interventions are e¤ective, they often entail various costs. Basu (2012), nonetheless, propose