{"id":508,"date":"2020-04-30T01:52:51","date_gmt":"2020-04-30T01:52:51","guid":{"rendered":"http:\/\/sites.rutgers.edu\/roberto-chang\/?page_id=508"},"modified":"2023-11-15T17:13:35","modified_gmt":"2023-11-15T17:13:35","slug":"fx-intervention-and-unconventional-policy","status":"publish","type":"page","link":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/","title":{"rendered":"FX Intervention and Unconventional Policy"},"content":{"rendered":"<figure id=\"attachment_496\" aria-describedby=\"caption-attachment-496\" style=\"width: 600px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-496\" src=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg\" alt=\"\" width=\"600\" height=\"348\" \/><figcaption id=\"caption-attachment-496\" class=\"wp-caption-text\">Presenting FX Redux at a conference in Antalya, Turkey<\/figcaption><\/figure>\n<ul>\n<li><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2023\/11\/CC_Reserves_Oct2023.pdf\"><strong>Optimal Foreign Reserves and Central Bank Policy Under Financial Stress<\/strong><\/a> (with Luis Felipe C\u00e9spedes). <strong>Forthcoming, AEJ: Macroeconomics<\/strong>. We develop an open economy model in which a central bank accumulates reserves to supply international liquidity if\u00a0 external financial constraints become binding. The model yields novel insights about the links between reserves accumulation and unconventional central bank policy. For example, we show that the optimal level of reserves depends on whether, in case of a crisis, the central bank provides liquidity to ultimate users (households or firms) or to domestic banks. We also provide a careful analysis of associated second best policy, and a comparison against capital flow management approaches. <strong><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2022\/11\/reservesslides2022.pdf\">Slides<\/a><\/strong><\/li>\n<li><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/05\/interventionfinal.pdf\"><strong>Foreign Exchange Intervention Redux<\/strong><\/a> In: <em>Monetary Policy and Financial Stability, <\/em>Alvaro Aguirre, Markus Brunnermeier, and Diego Saravia, eds., Banco Central de Chile, 2018. Develops the view that sterilized FX intervention should be analyzed as a special kind of unconventional policy. This requires a model with financial frictions, which must bind only occasionally in order to be consistent with the empirical evidence on FX intervention. The resulting perspective yields several novel lessons, not only for sterilized intervention but also for the question of reserves accumulation and the quasifiscal deficit of the central bank. <strong><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/05\/FX-Intervention-Redux.pdf\">Slides<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/www.sciencedirect.com\/science\/article\/pii\/S0022199617300028\">Financial Intermediation, Exchange Rates, and Unconventional Policies in an Open Economy<\/a><\/strong> (with Luis Felipe C\u00e9spedes and Andr\u00e9s Velasco).\u00a0<em>Journal of International Economics, <\/em>2017<em>. <\/em>\u00a0 A model of the interaction between financial frictions, exchange rates, and interest rates, applied to the analysis of unconventional monetary policy. <strong><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/05\/CCV-Unconventional-Policy.pdf\">Slides<\/a><\/strong><\/li>\n<li><strong><a href=\"https:\/\/link.springer.com\/article\/10.1057\/s41308-016-0024-y\">Financial Frictions and Unconventional Monetary Policy in Emerging Economies<\/a><\/strong> (with Andr\u00e9s Velasco). <em>IMF Economic Review, <\/em>2017<em>.<\/em> An analysis of monetary policy, conventional and unconventional, in emerging economies with financial frictions. <strong><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/05\/Unconventional-Monetary-Policy.pdf\">Slides<\/a><\/strong><\/li>\n<li><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IF2014.pdf\"><strong>Is Inflation Target Still on Target?<\/strong> \u00a0<\/a>(with Luis Felipe C\u00e9spedes and Andr\u00e9s Velasco).\u00a0<em> International Finance, <\/em>Summer 2014<em>.<\/em> A review of\u00a0 monetary policy in Latin American inflation targeting countries, with emphasis on the tensions between the theory of IT and actual practice.<\/li>\n<li><strong><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/05\/geneva.pdf\">Rethinking Monetary Policy After the Crash<\/a><\/strong>, Keynote Lecture of the First Annual Conference of the Bilateral Assistance and Capacity Building for Central Banks Program, Graduate Institute of International and Development Studies and Swiss Confederation State Secretariat for Economic Affairs. Geneva, October 2013<\/li>\n<li><strong><a href=\"http:\/\/www.bcentral.cl\/eng\/studies\/central-banking\/v16.htm\">Monetary Policy Under Financial Turbulence<\/a>,<\/strong> Luis Cespedes, Roberto Chang and Diego Saravia eds., Series on Central Banking, Analysis, and Economic Policies, Volume 16, 2011.<\/li>\n<li><strong><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/Vol16_219-281.pdf\">Heterodox Central Banking<\/a><\/strong> (with Luis Cespedes and Javier Garcia Cicco).\u00a0 A chapter in C\u00e9spedes, Chang, and Saravia 2011. Discusses theory and practice of central banking &#8220;unconventional&#8221; actions after the Global Financial Crisis.<\/li>\n<li><strong><a href=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/FLAR2007.pdf\">Inflation Targeting, Reserves Accumulation, and Exchange Rate Management in Latin America<\/a><\/strong>. <em>Papers and Proceedings, II International FLAR Conference, <\/em>Fondo Latinoamericano de Reservas, 2007. An early discussion of the tensions between FX intervention, reserves accumulation, and inflation targeting.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Optimal Foreign Reserves and Central Bank Policy Under Financial Stress (with Luis Felipe C\u00e9spedes). Forthcoming, AEJ: Macroeconomics. We develop an open economy model in which a central bank accumulates reserves &hellip; <a href=\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/\" class=\"\">Read More<\/a><\/p>\n","protected":false},"author":873,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"template-custom.php","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-508","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>FX Intervention and Unconventional Policy - Roberto Chang<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FX Intervention and Unconventional Policy - Roberto Chang\" \/>\n<meta property=\"og:description\" content=\"Optimal Foreign Reserves and Central Bank Policy Under Financial Stress (with Luis Felipe C\u00e9spedes). Forthcoming, AEJ: Macroeconomics. We develop an open economy model in which a central bank accumulates reserves &hellip; Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/\" \/>\n<meta property=\"og:site_name\" content=\"Roberto Chang\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-15T17:13:35+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/\",\"url\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/\",\"name\":\"FX Intervention and Unconventional Policy - Roberto Chang\",\"isPartOf\":{\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg\",\"datePublished\":\"2020-04-30T01:52:51+00:00\",\"dateModified\":\"2023-11-15T17:13:35+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#primaryimage\",\"url\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg\",\"contentUrl\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg\",\"width\":2071,\"height\":1200},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"FX Intervention and Unconventional Policy\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/#website\",\"url\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/\",\"name\":\"Roberto Chang\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/sites.rutgers.edu\/roberto-chang\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"FX Intervention and Unconventional Policy - Roberto Chang","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/","og_locale":"en_US","og_type":"article","og_title":"FX Intervention and Unconventional Policy - Roberto Chang","og_description":"Optimal Foreign Reserves and Central Bank Policy Under Financial Stress (with Luis Felipe C\u00e9spedes). Forthcoming, AEJ: Macroeconomics. We develop an open economy model in which a central bank accumulates reserves &hellip; Read More","og_url":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/","og_site_name":"Roberto Chang","article_modified_time":"2023-11-15T17:13:35+00:00","og_image":[{"url":"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/","url":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/","name":"FX Intervention and Unconventional Policy - Roberto Chang","isPartOf":{"@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/#website"},"primaryImageOfPage":{"@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#primaryimage"},"image":{"@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#primaryimage"},"thumbnailUrl":"http:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg","datePublished":"2020-04-30T01:52:51+00:00","dateModified":"2023-11-15T17:13:35+00:00","breadcrumb":{"@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#primaryimage","url":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg","contentUrl":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-content\/uploads\/sites\/408\/2020\/04\/IMG_0392-scaled-e1588203316684.jpg","width":2071,"height":1200},{"@type":"BreadcrumbList","@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/fx-intervention-and-unconventional-policy\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/sites.rutgers.edu\/roberto-chang\/"},{"@type":"ListItem","position":2,"name":"FX Intervention and Unconventional Policy"}]},{"@type":"WebSite","@id":"https:\/\/sites.rutgers.edu\/roberto-chang\/#website","url":"https:\/\/sites.rutgers.edu\/roberto-chang\/","name":"Roberto Chang","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/sites.rutgers.edu\/roberto-chang\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/pages\/508"}],"collection":[{"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/users\/873"}],"replies":[{"embeddable":true,"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/comments?post=508"}],"version-history":[{"count":18,"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/pages\/508\/revisions"}],"predecessor-version":[{"id":806,"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/pages\/508\/revisions\/806"}],"wp:attachment":[{"href":"https:\/\/sites.rutgers.edu\/roberto-chang\/wp-json\/wp\/v2\/media?parent=508"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}