De jure and de facto, Intervention, Managed floating, F31, F33, F41,

This article examines an endogeneity issue within the Optimum Currency Area (OCA) theory. According to the cost-benefit analysis, we found that there are the upper and the lower bounds in the degree of monetary integration for a monetary union to be created. We also found that a country may secede from the monetary union, depending on its degree of integration. A country may also secede when production specialization is facilitated with monetary integration within a framework of the “OCA line”. We also consider the endogeneity of the “OCA Index”, and applied our analysis to the optimum number of world currencies.Monetary Union, OCA, endogeneity,

This paper examines an intervention index in the foreign exchange market, applying the quarterly data of the Singapore economy during the 1990's. The intervention index measures intervention activity as the proportion of exchange market pressure relieved by exchange market intervention. Singapore is selected because (1) it is a small open economy and consistent with this empirical study, and (2) it has been affected by speculative attacks. The specific interest is the effectiveness of intervention conducted by the Singapore authority to mitigate exchange market pressure. It is concluded that the overall intervention activity is surprisingly successful over the sample period.