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Afewminuteslate Posted 16 years ago
Grammar
Unsterilized
Central banks can use reserves for intervention
in non-crisis times. Countries with rigid
declared exchange arrangements such as
pegs or crawling bands - and, in fact, many
countries with flexible declared exchange arrangements
- intervene to reduce volatility
or maintain a target exchange rate.2 If the
currency is fundamentally near equilibrium
but volatility remains high, intervention may
be in two directions, resulting in little net
change in reserve holdings. Intervention can
also act as a tool against deflation, both by
mitigating nominal appreciation, and, unsterilized,
by expanding the money supply.
I have no idea what "unsterilized" does here. Sterilization is a mean to mitigate inflation so it's not like he's contradicting himself; however, I don't know what its function in the sentence could be grammar-wise.
This extract is from:
Department of the Treasury: Office of International Affairs
Occasional Paper No. 6
March, 2007
Are High Foreign Exchange Reserves in Emerging Markets a
Blessing or a Burden?
in non-crisis times. Countries with rigid
declared exchange arrangements such as
pegs or crawling bands - and, in fact, many
countries with flexible declared exchange arrangements
- intervene to reduce volatility
or maintain a target exchange rate.2 If the
currency is fundamentally near equilibrium
but volatility remains high, intervention may
be in two directions, resulting in little net
change in reserve holdings. Intervention can
also act as a tool against deflation, both by
mitigating nominal appreciation, and, unsterilized,
by expanding the money supply.
I have no idea what "unsterilized" does here. Sterilization is a mean to mitigate inflation so it's not like he's contradicting himself; however, I don't know what its function in the sentence could be grammar-wise.
This extract is from:
Department of the Treasury: Office of International Affairs
Occasional Paper No. 6
March, 2007
Are High Foreign Exchange Reserves in Emerging Markets a
Blessing or a Burden?
Top answer
afewminuteslate Intervention can also act as a tool against deflation, both by mitigating nominal appreciation, and, unsterilized, by expanding the money supply. Intervention ( when unsterilized ) can act as a tool against deflation by expanding the money supply. We'd assume the author's opinion is that when intervention is sterilized, it's not effective in expanding the money supply.
- afewminuteslate Intervention can also act as a tool against deflation, both by mitigating nominal appreciation, and, unsterilized, by expanding the money supply.
- Intervention ( when unsterilized ) can act as a tool against deflation by expanding the money supply.
- We'd assume the author's opinion is that when intervention is sterilized, it's not effective in expanding the money supply.
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4 Answers
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afewminuteslate Intervention can also act as a tool against deflation, both by mitigating nominal appreciation, and, unsterilized, by expanding the money supply.Intervention (when unsterilized) can act as a tool against deflation by expanding the money supply.
We'd assume the author's opinion is that when intervention is steril
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If, as you say, sterilization mitigates inflation, it seems like your author is contradicting himself.
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Thank you. And it is not stupid of you since you were probably unfamiliar with the concept like me.
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