What is it about?
The paper proposes a model that allows central banks and policymakers to estimate the expected size of FX interventions that are necessary to implement a minimum FX rate regime.
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Why is it important?
The model allows the ex-ante assessment of the potential balance sheet risk that a central bank may incur when enforcing a minimum FX rate regime.
Perspectives
The paper is in line with the strand of literature on FX rate target zones.
Markus Hertrich
Universitat Basel
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This page is a summary of: The Costs of Implementing a Unilateral One-Sided Exchange Rate Target Zone, Review of Economics, January 2016, De Gruyter,
DOI: 10.1515/roe-2015-1006.
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